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October 2019 local market commentary: SWIX has second-best month of 2019

South Africa’s (SA’s) FTSE/JSE Capped SWIX Index had its second-best month of the year (+3.6% MoM) in October, with strong contributions across the board, particularly from the materials stocks. Gold shares bounced back from a poor September and were up 23% in aggregate for October, taking their YTD performance to over 100%. Platinum shares rose 16% for the month and are now up 140% in aggregate YTD. Elsewhere, strong results from retailers, Clicks and Pick ‘n Pay saw their share prices rally 15% and 11% MoM, respectively. Local listings with UK exposure were buoyed at the prospect of a much-reduced risk of a no-deal Brexit, with Investec, Brait and Capital & Counties up 8%, 14% and 14%, respectively, for the month. Sasol shares also staged a small relief rally (+8% MoM) after the company released delayed results with no incremental bad news. Local Chinese-tech listing, Naspers, which has been the primary source of returns for the local market for the last few years, was the biggest drag for the month (-6% MoM), held back by a weak performance from its largest holding, Tencent (-3% MoM), and a slight de-rating after the much-hyped unbundling of EU-listed Prosus in September.

US dollar weakness helped boost emerging market (EM) currencies during the month. The rand was up 4% leading into the Medium Term Budget Policy Statement (MTBPS) and subsequently gave up most of these gains (+0.3% MoM) after Finance Minister Tito Mboweni’s speech projected a deteriorating fiscal position for the country with a lack of clarity on dealing with the problems at state-owned entities. The rand weakened 2.5% on the day and yields on the benchmark R186 government bonds spiked 0.35% on increased fears that a review of the country’s creditworthiness by Moody’s (the day after month-end) would lead to a downgrade into sub-investment grade (junk) status. SA ultimately hung onto its investment grade status, although the deteriorating fiscal trajectory was enough to cause Moody’s to put the rating on negative watch.



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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.