February was another much-needed positive month in equity markets around the globe. An end to the US government shutdown at the end of January along with a continued dovish stance from the Federal Reserve lifted investor sentiment. While both the economic and political landscapes in Europe and the UK continue to impede these markets, positive US-China trade talks along with both fiscal and monetary stimulus in China kept global markets afloat. Locally, a realistic budget speech reflected ten years of poor budgeting although treasury was commended for attempting to rein in expenditure despite the clear obstacles (such as Eskom and other state-owned enterprises).
The JSE All Share Index is up 3.4% in February. Small-cap shares (-2.7%) struggled while Mid-cap shares (2.3%) and Large-cap shares (3.6%) posted positive returns for the month. Financial stocks (down 2.1%) struggled in February while the large, Rand-hedge Industrials performed well thanks to the weakening Rand (Industrials ended the month up 3.5%). Resource stocks (up 9.1%) had an excellent month as Impala Platinum (up 55.8%) and Sibanye Gold (up 36.7%) were the top two performing stocks in the Top 60.
Global Equities also had another positive month up. Developed Market equities outperformed their Emerging Market peers as challenges (such as weak activity along with high inflation and high debt levels) persist. The MSCI World ended the month up 3.1% in US Dollar terms while the MSCI Emerging Markets Index (up 0.2%) only managed a slightly positive US Dollar return.
South African listed property went from the top performing asset class in January (up 9.2%) to the worst performing in February (down 5.7%). Increasing volatility in this sector along with a tough economic outlook has caused investors to shy away from these stocks.
The Rand depreciated against most major currencies in February. It depreciated 6.0% against the Dollar and 5.1% against the Euro and 7.1% against the Pound sterling.
The US Dollar Gold price ended the month down slightly (0.5%) while the Platinum Price was up 6.4% in US Dollar terms. The Brent Crude Oil Price increased another 6.7%in US Dollar terms.
