South African (SA) equity markets suffered a third consecutive monthly decline (FTSE/JSE Capped SWIX Index -0.3% MoM), taking a bit of the shine off what was an otherwise strong year for the local bourse (FTSE/JSE Capped SWIX +13.5% YoY). Miners (-5% MoM) were the biggest culprit behind the JSE’s negative performance in December and the only major JSE segment to deliver a negative return in 2024 (-11% YoY). JSE-listed stocks with earnings geared predominantly to the local economy had a marginally positive December (+0.25% MoM), ending a very strong year for that cohort (+21% YoY). Platinum miners fared particularly poorly (-12% MoM and -26% YoY) in the face of weak metal prices, with platinum (-5% MoM and -9% YoY) holding up only marginally better than palladium (-7% MoM and -17% YoY).
Investment companies Naspers and Prosus (+3% MoM and +34% YoY) were boosted by a strong performance from their largest underlying investment, Chinese tech conglomerate Tencent (+49% YoY in rand terms), despite a lacklustre Chinese economy in 2024. Rand-hedge companies (those JSE-listed corporates with predominantly foreign earnings) eked out a positive return in December (+1% MoM), thanks largely to a strong currency tailwind, with the rand weaker against the US dollar (-4.2% MoM).
The domestic currency was one of the worst-performing major currency pairs against the US dollar in December, leaving it weaker against the greenback for the year (-2.6% YoY). Despite the tough end to the year, the rand found itself as the fourth-best-performing major currency against a strong US dollar in 2024 (behind the Malaysian ringgit, Thai baht, and British pound).
The SA government’s 10-year borrowing rate followed global borrowing rates higher in December, rising 0.2% to end the year at 10.3% p.a., having started 2024 at 11.4% p.a. The fall in domestic government borrowing rates in 2024 came despite a 0.7% p.a. rise in the US government’s 10-year borrowing rates in 2024. Lower domestic borrowing rates helped the JSE All Bond Index to a 17% YoY return, outperforming the FTSE/JSE Capped SWIX for the second consecutive year.
