‘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.
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