Market Overview
The FTSE/JSE All Share closed last week at 81 978.56, increasing by 0.75%. The basic materials and telecommunications sectors were the biggest contributors gaining 4.11% and 1.65% during the week. The health care and industrials sectors were the biggest detractors, decreasing by 2.81% and 2.44% respectively over the same period
Looking at the MSCI indices, developed markets increased by 3.34% during the previous week, while emerging markets increased by 0.79% over the same period.
SA manufacturing increases
Annual manufacturing production in South Africa increased by 1.7% in July 2024, recovering from a revised 5.5% decline in the prior month and more than an expected 0.7% increase. This marks the first rise in industrial activity after two consecutive months of decreases, mainly due to a sharp rebound in the production of food and beverages.
SA inflation sees a further slowdown
Annual consumer price inflation slowed further in July, to 4.6% year-on-year, compared to 5.1% in June. This brings inflation within a whisker of the SARB’s 4.5% target level, making a September interest rate cut a near certainty.
Looking ahead, the further improvement in inflation should ease any concerns the SARB might have. Although their key concern is still that surveyed inflation expectations remain elevated, the argument for maintaining above-neutral rates is becoming less convincing. The market expects both the US Fed and the SARB to cut rates in September, joining the growing cohort of global central banks that have already eased policy this year. With a cut now almost guaranteed, the current debate is less about the likelihood of a cut, but rather the scale and pace these will happen.
Thanks to PPS Investments for the Market overview.
Market Indicators supplied by Sharedata.co.za
South African rand gains, interest rates in focus this week
The South African rand gained in early trade on Monday, as markets geared up for a week packed with interest rate announcements and a local inflation print. Read the full Reuters report here>
South Africa on the rise
South Africa is poised for a period of economic growth and financial relief thanks to a combination of factors, including pension withdrawals, interest rate cuts, and easing inflation. Read the full Daily Investor article here>
Here is the expected petrol price for October
Mid-month data from the Central Energy Fund (CEF) points to another sizeable petrol and diesel price cut coming in September. The data from the CEF shows that petrol prices are slated for a cut of around R1.24 per litre, while diesel prices are on track for a cut of around R1.10 per litre. Read the full Businesstech article here>
World braces for Fed easing amid 36-hour rate rollercoaster
South African policymakers are anticipated to cut borrowing costs for the first time since 2020, while counterparts in Norway and Turkey may keep them unchanged. Read the full Moneyweb article here>
Oil edges higher as traders await Fed rate decision
Oil prices edged up in early trade on Monday amid the expectation of a US interest rate cut this week, though gains were capped by weaker China data and persistent demand worries. Read the full BusinessDay article here>
Global stocks are mixed as data show China’s economy slowing further
Global stocks were mixed on Monday after U.S. stocks finished their best week of the year, approaching record levels. The dollar dipped below 140 yen. France’s CAC 40 rose 0.1% to 7,473.37, while Germany’s DAX lost 0.3% to 18,638.46. Britain’s FTSE 100 edged 0.1% lower to 8,268.12 ahead of a meeting of the Bank of England’s on Thursday. Read the full AP article here>