URGENT ALERT: Please beware of fraudulent WhatsApp groups and other groups across Social Media pretending to be affiliated with Anchor and Anchor staff members. Do not engage with these malicious and fraudulent groups in any way. Please direct all queries to invest@anchorcapital.co.za.

May local commentary: JSE continues record streak of consecutive MoM gains

Last month, South African (SA) stocks added to a record-breaking streak of consecutive monthly gains stretching back to October 2020 (FTSE/JSE Capped SWIX +2.9% MoM). May was a great month for domestically focussed companies with the local banks, insurers, and retailers all up over 10% MoM in aggregate. The miners, which have been responsible for around half of the local market’s returns in the year leading up to this month, faltered in May (-1.5% MoM) and were a drag on performance despite a good showing from the gold miners (+19% MoM) and Glencore (+8% MoM). Naspers and Prosus also detracted from the local market performance in May (-8% MoM in aggregate), struggling to overcome a negative month for their core underlying investment, Tencent (-0.4% MoM in Hong Kong dollar terms), and a strong currency headwind in a month where the rand was the best-performing major currency against the US dollar (+5.5% MoM).

Despite the strong local currency, two index heavyweights with predominantly offshore earnings, Richemont and Anheuser-Busch InBev (AB InBev), were both able to deliver positive MoM rand returns (up 11% and 1.3% MoM, respectively) as markets responded positively to their respective earnings releases. Luxury goods retailer, Richemont, which typically relies on Chinese tourists for a quarter of its revenue was, in the absence of international travel, able to convert most of those purchases into sales in the domestic market for Chinese customers and was able to grow revenue in its critical jewellery division, despite the pandemic. Global brewer, AB InBev delivered results revealing that 1Q21 volumes in the Americas (c. 75% of earnings) were ahead of pre-pandemic levels and profits in the lucrative North American region showed robust growth.

Other notable earnings from May included Raubex (+25% MoM), which reported 68% growth in its secured order book (to R17bn) and a R20bn project pipeline, and Mr Price (+28% MoM), which comfortably beat expectations with a strong second-half performance that included market share gains, increased retail sales volumes, and lower markdowns.

Economic data during the month included a 3.7% MoM decline in March seasonally adjusted retail sales (relative to expectations of a slight increase), and a 4.4% YoY gain in inflation as base effects from the initial pandemic lockdowns took hold. Higher inflation is likely to be transitory and still within the SA Reserve Bank’s (SARB’s) 3%-6% target range and, as such, the SARB voted unanimously to keep rates on hold (in-line with expectations).



Submit your details and we’ll give you a call back to assist and advise you on your investment.


Subscribe to our newsletters to receive regular market commentary, research and updates from the Anchor team. Select between our Individual or Financial Advisor newsletters by selecting the relevant tab below.

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.