Global equity markets experienced a sharp sell-off in the first week of April but managed to recover most of the losses by month-end. The initial weakness was largely driven by concerns over US trade policy and broader economic uncertainty. However, equities rebounded after the Trump administration softened its tariff stance and tensions with China eased. The US bond market also saw notable volatility, with Treasury yields spiking due to a combination of structural and cyclical factors. March inflation in the US came in lower than expected, with headline and core rates at 2.4% and 2.8% year over year, respectively.
South African equities maintained their strong performance in April, outperforming both Developed and Emerging Market composites. While South African bonds sold off earlier in the month, they later rebounded as expectations of a potential repo rate cut by the SARB gained traction. Headline year-on-year inflation slowed to 2.7%, coming in below consensus expectations. Core CPI also decelerated to a new cyclical low of 3.1%, further undershooting forecasts and reinforcing the case for a more accommodative monetary policy stance. In response to mounting political pressure and widespread protests, the Government of National Unity reversed the VAT increase.
- The JSE All Share traded sharply higher in April, up 4.3%.
- Industrials (up 5.0%) bounced back in April, Financials (up 4.6%) and Resources (up 2.1%) also managed to deliver positive returns.
- Small-caps (up 3.9%), Mid-caps (up 2.2%) and Large-caps (up 4.5%) delivered strong gains.
- South African property rebounded strongly in April, gaining 10.3%, while the S&P SA REIT Index also recovered, rising 8.0% over the month.
- SA Nominal Bonds (up 0.8%) crept higher again over the month as bond yields continued to move higher, while Inflation-Linked Bonds were negative, down 0.1%.
- Emerging Market equities outperformed the Developed Market Equities in US Dollar terms again in April. The MSCI World Index rose 0.9% and the MSCI Emerging Market Index rose 1.3%.
- Relative to the U.S. Dollar (Rand depreciated 1.2%), the Euro (Rand depreciated 6.5%) and the Pound Sterling (Rand depreciated 4.7%).
- Gold prices surged 5.8% in April, while Platinum fell by 4.5%. Brent Crude experienced a sharp decline, dropping 15.5% over the month.
Source: Factset
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