In November, the US election concluded with Donald Trump confirmed as the president-elect. What was initially expected to be a close race ended in a decisive victory for the Republicans, who won the Electoral College, the popular vote, the House of Representatives, the Senate, and all seven battleground states of the current election year. This news resulted in a positive month for developed market equities, while emerging market equities experienced a slight sell-off due to concerns about the potential impact of the new US presidency’s protectionist policies on the developing world.
South African equities faced another challenging month, primarily driven by declining commodity prices, which negatively impacted resource stocks and dragged the index down. In contrast, retailers had a strong performance during the same period. The local headline inflation rate for October decreased to 2.8%, leading the SARB to reduce interest rates by an additional 25 basis points during the November Monetary Policy Committee meeting. The SARB’s composite leading indicator recorded its sixth consecutive month of year-on-year growth, supported by ongoing optimism related to the Government of National Unity (GNU), a stronger Rand, and the absence of load-shedding, among other factors.
- The JSE All Share slipped down 0.9% for the second month in a row.
- Financials (up 0.5%) and Industrials (up 0.5%) were up slightly while Resources (down 6.6%) felt the effect of weaker commodity prices.
- Small-caps (up 3.6%) held up well for the month while Mid-caps (down 0.1%) and Large-caps (down 1.6%) ended the month in the negative.
- Both the S&P SA REIT sector (up 1.2%) and the SA Listed Property sector (up 1.7%) showed some growth over the month.
- SA Nominal Bonds (up 3.0%) and Inflation Linked Bonds (up 0.9%) benefited from improved fiscal outlook and optimism.
- Developed Market Equities outperformed their Emerging Market peers in US Dollar terms, with the MSCI World Index up 4.6% and the MSCI Emerging Market Index down 3.6%.
- Relative to the U.S. Dollar (Rand depreciated 2.2%), the Euro (Rand appreciated 0.6%) and the Pound Sterling (Rand depreciated 1.0%).
- Commodities prices broadly fell in November, with Gold (down 3.0%), Platinum (down 4.2%) and Brent Crude (down 0.3%).
Source: Factset
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