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March local commentary: Despite turmoil on global markets, the JSE ends the month and 1Q25 on a positive note

South African (SA) equity markets ended the first quarter on a positive note (FTSE/JSE Capped SWIX Index +3.6% MoM/+5.9% YTD) despite turmoil in global equity markets. Unfortunately, the positive numbers at the index level masked divergent underlying trends, with exceptional performances from the gold (+33% MoM/+68% YTD) and platinum miners (+40% MoM/+37% YTD), but the remainder of the index constituents delivered negative performances in aggregate MoM and YTD. The gold price (+9% MoM/ +19% YTD) breached US$3,000/oz during March, having been as low as US$1,800/oz less than 18 months ago, while platinum group metals (PGMs) had a strong March, particularly rhodium (+21% MoM).

Standard Bank (+10% MoM) was amongst the individual counters outside of precious metals miners on the JSE to defy the general gloom, reporting a 4% YoY increase in headline EPS (in line with expectations) but surprising investors positively with guidance for 12% EPS growth from 2026 to 2028. Sun International (+9% MoM) reported earnings growth of 3% YoY for 2024, but with 60% YoY growth in online gambling revenue, an area it will continue to focus on as it brings in its new Swedish CEO, Ulrik Bengsston, who has extensive online gambling experience.

Education stock, Curro, was amongst the local bourse’s most disappointing performers in March (-28% MoM) as it released results which showed the company still operating at suboptimal occupancy (72%) and slowing enrolment levels. MAS plc was another disappointment (-19% MoM) as its latest earnings announcement was accompanied by news that it remains unable to reach an agreement to unwind its complex and challenging relationship with developer PKF.

SA core inflation (+3.4% YoY) came in below expectations (3.5% YoY) as price growth continued to slow towards the lower band of the SA Reserve Bank’s (SARB’s) target range (3%-6% p.a.). Despite subdued inflation, the SARB kept the SA benchmark interest rate unchanged (7.5% p.a.), leaving the country’s prime lending rate (11% p.a.) roughly 1.5% above its 15-year average. The SA government’s 10-year borrowing rate was also unchanged for the month (+10.6% p.a.), with the US 10-year borrowing rate (4.2% p.a.) similarly unchanged for March. The local currency strengthened against a generally weak US currency in March (+2% MoM/+2.8% YTD).

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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.