September 2019 local market commentary: Financials close the month higher

South African (SA) markets started September on a strong footing, with the Capped SWIX Index up over 6% by mid-month and the rand strengthening by 4% over the same period as receding global recession fears and increasing optimism for a resolution to trade wars buoyed global sentiment. However, geopolitical risk conspired to reverse those gains by month-end with the Capped SWIX Index ending September up only 0.7% and the rand just 0.3% stronger.

Gold shares, which were up 28% in aggregate in August, had given back most of those gains by mid-September, although these shares recovered some of their losses in the second half of the month the sector still ended September 14% lower. SA banks, insurers and retailers closed the month up around 5% in aggregate and were responsible for most of the index performance last month, with Capitec (+17%), Momentum Metropolitan (+15%) and Shoprite (+10%) leading the way. The spike in oil prices related to the drone attack on Saudi oilfields briefly lifted beleaguered Sasol’s share price, but that was short-lived and, as oil prices settled, Sasol continued its decline, ending the month down 12%. During September the much-anticipated spin-off of the Prosus listing by JSE-heavyweight, Naspers initially created some excitement, with the share up 8% into the mid-month event, but that also faded into month-end with the combined Naspers/Prosus performance a slight drag on the index for the full month.

SA benchmark government bonds (due in 2026) ended the month with yields slightly higher (+0.16% to 8.31%), following the trend of higher global bond yields. The SA Reserve Bank (SARB) kept rates unchanged at its September meeting, much in-line with expectations and despite lacklustre growth expectations. SARB Governor Lesetja Kganyago suggested that the SARB’s models don’t forecast the need for another cut this year and forward-rate agreements fell as traders became less optimistic about more rate cuts, despite the SARB’s statement appearing more dovish than the previous one.



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.

Insights and commentary to help you navigate markets.

Subscribe to Anchor's daily Current Co-ordinates newsletter.

Newsletter popup