Global equities gained in what was a very bumpy start to the year. Geopolitical tensions, tariff threats and concerns about Fed independence sent precious metals to record highs during the month. The Fed kept its funds rate unchanged in the January meeting, which was in line with expectations. US markets were further boosted as companies started reporting their quarterly results. A strong rally in emerging markets, catalysed by a weaker dollar and surging commodity prices, enabled them to end ahead of their developed market peers once again.
Local equity markets added substantially, as the resources and financial sectors were supported by the weaker dollar and stronger commodity prices. The SARB kept rates unchanged, as inflation remained at subdued levels. South African bonds continued their consistent performance, recording their thirteenth positive monthly performance. This is the longest positive streak for the SA All Bond Index in over 26 years.
- The JSE All Share started the year on a high, notching 3.7% in the month.
- Resources (up 12.5%) rocketed higher, as Financials (up 3.0%) boasted a respectable performance. Industrials (down 3.4%) fell sharply, detracting substantially from the larger bourse.
- Small-caps (up 1.1%) inched upwards, as Mid-caps (up 6.3%) recorded a phenomenal month, with Large-caps (up 4.0%) not too far behind.
- South African property markets gained modestly, as the ALPI added 1.0%, and the S&P SA REIT Index gained 1.4%.
- SA Nominal Bonds (up 1.9%) grew nicely, and Inflation-Linked Bonds (up 1.2%) added good growth despite lower CPI targets in South Africa.
- Developed market equities had a strong January, as the MSCI World Index (up 3.0% in USD) climbed in a volatile environment. However, they still lagged emerging market equities, as the MSCI Emerging Market Index (up 8.9% in USD) closed significantly higher.
- The Rand strengthened in January, in addition to dollar weakness the rand appreciated against most major currencies. Relative to the US Dollar (Rand appreciated 3.2%), the Euro (Rand appreciated 2.0%) and the Pound Sterling (Rand appreciated 1.3%).
- Gold added for the month, up 9.0%, despite it being a volatile month for the precious metal. Platinum continued to gain, up 3.4%, and Brent Crude added 16.2%, on the back of geopolitical tensions between Iran and the US.
Source: Factset
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