Developed market equities continued to prove volatile throughout March, as the broad MSCI World index declined 4.4% in US Dollar terms. Market participants are becoming increasingly worried as policy uncertainty and the effects of tariffs have yet to impact consumers. Geopolitical tensions resurfaced as phase 1 of the ceasefire in Gaza ended violently, while US support for Ukraine diminished under President Trump. The Bloomberg Magnificent 7 Total Return Index decreased by 7.3% in the month, resulting in a year-to-date decline of 16.0%. The gold price surged to a record high of $3,100 per ounce, marking the strongest quarterly performance for the yellow metal since 1986.
South Africa’s equity markets experienced strong performance over the month, recording returns of 3.6% in Rand terms. This positive outcome was primarily driven by the resources sector, particularly due to a rebound in gold miners as the price of gold rose. In comparison, the broader emerging markets (EM) index saw a modest positive return of 0.6% in Dollar terms. The SARB maintained the interest rate at 7.5% during its March MPC meeting, following 25 basis point cuts in each of the previous three meetings. Two of the six members supported an additional cut. After an initial postponement in February, Finance Minister Enoch Godongwana presented the 2025 Budget Speech in March, where he tabled increasing VAT by 0.5% for 2025 and an additional 0.5% in 2026.
- The JSE All Share traded sharply higher in March, up 3.6%.
- Resources (up 18.4%) bounced back in a big way from the previous month’s decline, while Industrials (down 0.3%) and Financials (up 0.2%) traded somewhat flat over the month.
- Small-caps (down 0.3%) delivered slightly negative performance, while Mid-caps (up 3.7%) and Large-caps (up 4.1%) delivered strong gains.
- SA Property had yet another volatile month, as the S&P SA REIT index (down 1.7%) dipped, and the SA Listed Property index (down 0.9%) ended slightly lower for a third consecutive month.
- SA Nominal Bonds (up 0.2%) crept higher again over the month as bond yields continued to move higher, while Inflation-Linked Bonds were flat, up 0.0%.
- Emerging Market equities outperformed the Developed Market Equities in US Dollar terms again in March. The MSCI World Index dropped sharply 4.4% and the MSCI Emerging Market Index rose 0.7%.
- The Rand had another mixed month. Relative to the U.S. Dollar (Rand appreciated 1.0%), the Euro (Rand depreciated 2.9%) and the Pound Sterling (Rand depreciated 1.5%).
- Commodity prices rose across the board in March, as the Gold price surged higher up 10.1% Platinum bounced back up 8.3% after the fall in February, and the price of Brent Crude increased by 2.1%.
Source: Factset
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