Nov 22

Local Markets Review

Consistent with many other global markets, we saw weakness across the board in the local market as the All-Share Index closed down by 3.4% for the month. The biggest losers were the Financial and Industrial sectors, both down by 5%, followed by Property, lower by 4.3% and Resources, by 0.1%. Counted among the big losers were Anheuser Busch, lower by 3.2%, Naspers 6% lower, Prosus down by 7% and BHP by 1%. The green on the screen was provided by Anglos (+3.6%) and Glencore (+7.6%).

Economic data for the month saw an increase in CPI to 4.8% in August vs the previous reading of 4.7% in July, largely driven by the increase in energy costs (notably rising Brent crude prices), which mitigated the easing of inflation in food and non-alcoholic beverages.

Consistent with the stance adopted by most other central banks, the SA Reserve Bank kept rates unchanged, with the repo at 8.5% and prime at 11.75%. The SARB sounded a note of caution, however, as it flagged the upside threats of inflation, as well as the potential inflationary impact of any expansive fiscal policy. Reprising the same cautionary tone, the South African Reserve bank (SARB) hinted at the possibility that further rate tightening might be in the offing dependent on the emerging data.