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September local market commentary: The JSE ends a second consecutive month lower

The South African (SA) market fell along with global markets in September (FTSE/JSE Capped SWIX -1.1% MoM), retreating towards a double-digit YTD drop (-9.8%). In a reversal of the trend seen earlier in the year, it was the domestically exposed counters that performed best, up over 4% MoM in aggregate, with particularly strong contributions from local banks (+8.6% MoM) and a double-digit return from local retailers (+11% MoM). Those sectors were led by Capitec (+24% MoM) as its 1H20 results feedback pointed to a strong recovery in its second quarter and the addition of 800,000 new clients, and Shoprite (+26% MoM), which was able to grow turnover by 6.4% YoY despite the pandemic. The stalwarts from the first part of the year, gold miners and Naspers/Prosus, had their second consecutive negative monthly contribution. Gold miners fell 11% MoM as the US dollar price of gold dropped by 4.2% for the month. Naspers regained some of the ground it lost relative to Prosus in August, as Prosus dropped by 9% in September and Naspers fared slightly better with a 4.3% MoM decline.

The rand ended the month 1.1% stronger against the US dollar despite the dollar strengthening against most currency pairs, diverging from the fortunes of its EM peers which were generally weaker (Turkish lira -4.8% MoM, Russian rouble -4.7% MoM, Brazilian real -2.0% MoM). Yields on the local R186 benchmark government bond also benefitted from more positive domestic sentiment, ending the month 0.2% stronger at 7.2%.

Stats SA released its delayed report on the state of the SA labour market at the end of 2Q20, showing that 2.2mn jobs were lost in the quarter that covered the most restrictive part of the COVID-19 lockdown. As the government has progressively removed restrictions on economic activity and with the initial wave of COVID-19 infections seemingly under control, hopes are that subsequent data releases will show that many of those jobs have been regained in the last two quarters of the year.



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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.