Market overview
The FTSE/JSE All Share closed last week at 79 530.63, increasing by 1.41%. The consumer discretionary and technology sectors were the biggest contributors, increasing by 3.75% and 3.68% respectively. The telecommunications and health care sectors were the biggest detractors, decreasing by 5.39% and 0.39% during the same period.
According to the MSCI indices, developed markets increased by 1.61% last week, while emerging markets increased by 2.71%.
SA rates remain on hold
The South African Reserve Bank unanimously decided to maintain interest rates at 8.25%, in line with market expectations. While the inflation forecast risks are considered broadly balanced, the Committee believes that high inflation expectations necessitate meeting their target sooner rather than later to re-anchor these expectations. Inflation fell for the second consecutive month to 5.2% in April, down from 5.3% the previous month, but still higher than the target of 4.5%.
Forecasts now indicate that inflation is expected to reach the midpoint of its target range in the second quarter of 2025, earlier than previously predicted, as it was initially expected to occur by the end of next year.
SA producer price increases
South Africa’s annual producer price inflation rose for the second consecutive month to 5.1% in April 2024, the highest level in six months, up from 4.6% in the previous month. On a monthly basis, producer prices increased by 0.5% in April, after a 1.1% rise in the prior month. The PPI indicates changes in producer prices of locally produced commodities including exports.
Indian growth surprises
In the quarter ending in March 2024, the Indian economy grew by 7.8% year over year, surpassing initial projections of a 6.7% expansion. The result confirmed that India is the world’s fastest-growing major economy, driven by a sharp rise in output for manufacturing, construction, public administration, defence, and other services.
Thanks to PPS Investments for the weekly Market Overview.
SA’s post-election wrangling leaves investors in limbo
Investors braced for further upheaval in South Africa’s financial markets in the wake of elections that produced no outright winner, with the outcome of coalition talks and future policy direction remaining highly uncertain. Read the full Moneyweb article here>
New retirement system for South Africa hits roadblocks
President Cyril Ramaphosa may have signed the Revenue Laws Amendment Bill, but other pieces of legislation and systems still need to be signed and created before the Two-Pot retirement system becomes effective. read the full Businesstech article here>
Motorists can look forward to lower fuel prices in June, says AA
A stronger average rand-dollar exchange rate in May and lower international product prices are driving down local fuel prices and South Africans can expect good news when official fuel data is adjusted for June. Read the full BusinessDay article here>
Oil swings after OPEC+ signals plan to return barrels to market
Oil swung between gains and losses after OPEC+ set out a plan to restore some production as early as October, despite concerns over the demand outlook and robust supply from outside of the group. Read the full Moneyweb article here>
Asian shares rise on hope of rate relief
Asian share markets rallied on Monday, as investors looked forward to an interest rate cut in Europe and quite possibly Canada as the next step in global policy easing, though sticky inflation threatens to make the process a drawn-out affair. Read the full BusinessDay article here>
Key Engines of US Consumer Spending Are Losing Steam All at Once
The main drivers behind the remarkably resilient American consumer are losing steam at the same time, suggesting a recent pullback in household demand may be more than just a one-off. read the full Bloomberg article here>