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December 2019 local market commentary: Platinum shares lead the way

The “phase 1” trade deal between China and the US helped catalyse a rally in emerging market (EM) stocks and currencies, dragging the rand (+4.7% in December) and the local bourse (FTSE/JSE Capped SWIX Index [Capped SWIX] +3.1% in December) with them. The December rally helped the Capped SWIX end the year 6.8% stronger and the annual US dollar return of 9.8% left it as the only major global index to not reach double-digit US dollar returns for the year. Platinum shares were again leading the way, up another 20% to cap a year in which their share prices tripled! Gold shares continued the rollercoaster bouncing back from a double digit sell-off in November to post a double-digit gain in December, leaving gold stocks up 120% for the year. Gold and platinum shares accounted for 80% of the Capped SWIX performance in 2019 and almost half of December’s performance. Naspers was the other key contributor in December as it combined with Prosus to end the month up 8%, in aggregate, helped by rand strength and a rally in Chinese shares. Sasol finished an otherwise disappointing year with a strong performance, up 15% as it was buoyed by a rally in the oil price and the hope that it may avoid a capital raise.

Beyond Naspers and the precious metal stocks the SA Inc. component of the index had a largely disappointing month to cap a disappointing year. Apart from Capitec (+31%), Investec (+10%), MMI (+32%) and Clicks (+37%) it was hard to find a SA Inc. share with a positive performance for 2019. There were plenty of major SA Inc. shares that delivered significant losses for the year including Nedbank (-17%), Discovery (-23%), KAP (-46%) and Netcare (-21%) with some of the worst performances for 2019 coming from the retail sector including Massmart (-50%), Shoprite (-32%) and Truworths (-41%). Property shares also had a rough end to another forgettable year (-2% in December) for a total return of just 2% in 2019 including 9% of dividends. The rand-hedge component of the local bourse made up of companies generating earnings predominantly outside SA had a decent December, despite a strong currency headwind, thanks largely to British American Tobacco which was up over 5% for December and 36% for the year.

SA government bonds benefited from the EM rally as the benchmark R186 government bond yields dropped 0.2% in December to end the year at 8.25%, still an impressive real yield given Stats SA’s announcement of a decade-low 3.6% inflation rate during the month.



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WEBINAR | The Navigator – Anchor’s Strategy and Asset Allocation, 2Q24

Anchor CEO and Co-CIO Peter Armitage will host the webinar, provide an introduction to current global and local market conditions and give his thoughts on offshore equities. Together with Head of Fixed Income and Co-CIO Nolan Wapenaar, Pete will also discuss Anchor’s strategy and asset allocation for 2Q24, focusing on global equities and bonds. In addition, Fund Manager Liam Hechter will provide insights into local equities, highlighting some investment ideas; Global Equities Analyst James Bennet will discuss Ferrari and give an update on Tesla, and finally, Analyst Thomas Hendricks will participate in a Q&A with Peter, explaining the 10-year US Treasury to attendees.