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Local market commentary – April 2019

Eskom kept the lights on in April and helped ease the mood of South African investors, who drove the FTSE/JSE Capped SWIX Index up 5% for the month – its best performance in almost 2 years. Naspers was again a key contributor (+9.7% in April) dragged along by Tencent, which is now up 23.6% YTD. Banks and domestically focussed companies bounced back from a mediocre start to the year and a dismal March and were responsible for the bulk of the non-Naspers performance, with those companies gaining c. 8%, in aggregate, for April. Materials companies, which have done much of the heavy lifting YTD alongside Naspers, took a breather in April and were slightly down for the month, in aggregate. Amongst those Sasol was up 5.4% on the back of higher oil prices, however, the gold miners had a tough month as labour issues continued to put pressure on production.

Clicks and Pick n Pay were the only major domestic corporates to release results in April, both delivering earnings that exceeded expectations.

After a reprieve from ratings agency, Moody’s after markets closed at the end of March, the South Africa rand started the month strongly, gaining over 4% in the first half of the month, to nudge below R14/US$1. However, this was short lived and the currency retraced most of those gains into month-end, likely waiting for election results early in May before choosing a more sustainable trajectory. Bond yields followed a similar path, with the R186 government bond ending the month with its yield marginally lower at 8.5%.

Economic data released in April was mostly positive, with inflation coming in slightly below expectations (4.5% YoY) and retail sales (1.1% YoY), money supply (7.0% YoY) and private sector credit growth (6.1% YoY) all beating consensus expectations.



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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.