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Market Update

Market Update – July 2014

Global July proved to be a mixed month for global equity markets with the MSCI World posting a -1.7% (USD) return dragged lower by Japan (-2.3%), Europe(-1.9%) and the UK(-1.9%), whilst the US bucked the trend posting 0.3%. Emerging Markets fared better with the MSCI EM Index returning 1.4% (USD) led higher by China and Indonesia. Global bond markets dropped 0.4% (USD), as measured by the Citigroup World Government Bond Index. Read the full article Domestic Locally, the JSE was up, returning 0.9% (ZAR) in July with Resources (5.1%) and Financials (1.2%) positive whilst Industrials fell 1%. Nominal fixed interest markets also reflected gains with the All Bond Index returning 1.0% while their inflation linked counterparts fell 0.1%. Following hard on the heels of a five month economically crippling strike in the platinum industry the 1st of July saw NUMSA...
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Market Update – June 2014

Global Global equity markets continued their upward trend with the MSCI World posting 1.7 %(USD) mainly on the back of strong US(2.1% USD) and Japanese(5.2% USD) gains with Europe flat(-0.1% USD). EM markets also benefitted from the risk on environment, posting 2.0% (USD) while global fixed income markets returned 0.4%(USD) in June. In the U.S.A. the Bureau of Economic Analysis announced a final negative 2.9% decline in GDP for the first quarter of 2014 which came as a shock following the positive 2.6% growth in GDP the previous quarter. Read the full article GTC Fund Performances The GTC High Equity Funds (previously Aggressive) continues to deliver outperformance relative to the inflation adjusted target. Over the past 12 months, the main contributors to performance have been the equity market and offshore allocation. 2014 has seen a reversal of last year’s trend...
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Market Update – May 2014

“Sell in May and go away” The time tested adage of “sell in May and go away” could yet prove appropriate as both domestic and major global stock markets rocketed to all time highs. One notable exception was the Eurozone where economies are only now showing signs of emerging from a double dip recession and company earnings are slowly improving from a very low base. Continued quantitative easing, manifesting itself in surplus liquidity in the hands of investors constantly seeking yield pick-up, remains a major factor driving investment markets. The levels to which many of these markets have now risen is beginning to seriously question how one can justify current share valuations. Despite weak growth, the U.S. economy contracted 1.1% in quarter one attributed mainly to inclement weather conditions, the S&P 500 reached all time highs during the month breaching...
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Market Update – March 2014

Risk off, risk on markets Domestic markets continued to display considerable volatility during March as both global and domestic events impacted on investment sentiment. In the earlier part of the month risk off was largely dictated by indications of a slowdown in Chinese economic growth impacting negatively on South African exports of raw materials. This slowdown has increased speculation in the Chinese financial sector that weakening growth will prompt government policy makers to reconsider their aversion to introducing broad stimulus measures. The Chinese government faces a precarious balancing act of reining in credit expansion that often fuels the risk of loan default, while averting an economic slump that raises the odds of higher unemployment. Read the full article   GTC Fund Performances The GTC High Equity Funds (previously Aggressive) have continued to deliver outperformance relative to the inflation adjusted target. Over the...
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Market Update – February 2014

Budget 2014/2015 Apart from Minister Pravin Gordhan’s budget speech, February brought with it interesting and counter intuitive developments both in the local equity and bond markets. The 2014 Budget focuses on interventions that are aimed at placing the economy on a new growth trajectory. Government’s primary objective is to raise real economic growth to between 5 and 6 percent per annum. This higher level of economic growth should boost state revenue and enable the government to increase expenditure on improving peoples’ lives by dealing with the high levels of unemployment, poverty and inequality. Read the full article The Rand shock absorber effect U.S.Federal Reserve chair Janet Yellen suggested before the Senate banking committee that the pace of the Fed’s economic stimulus plan tapering could be slowed if weakness in the American economy continued. Wall Street rallied as a result with the...
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Market Update – January 2014

‘Risk off’ environment hammers markets January was an eventful month, influenced largely by the United States Federal Reserve’s (Fed) decision to continue tapering its quantitative easing programme announced in December. Fed chairperson, Janet Yellen, announced a further reduction of $10 billion per month lowering the Fed’s purchases of securities to $65billion per month effective from February. Read the full article Market returns The ‘risk off’ withdrawal of funds from our shores led to negative returns across local markets as well as a significant weakening of the Rand against developed world currencies. The JSE All Share lost 2.36% over the month dragged down by Industrials (-4.6%) and Financials (-6.9%). The Resource sector delivered a strong 5.9% in January off the back of a stratospheric 27.5% delivered by the Gold Mining sub sector as well as positive performances from the other subsectors...
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