After strong performance in June, financial markets struggled in July. Locally, declining growth forecasts and continued concerns regarding Eskom debt saw both equity and bond markets decline. Both the South African Reserve Bank and the US Federal Reserve reduced interest rates by 25bps. The reduction in US interest rates along with positive earnings reports from US companies saw developed market equities post slightly positive Dollar returns for the month while Emerging Markets declined.
The JSE All Share Index (down 2.4%) struggled in July as Resource stocks (down 5.2%) were unable to continue their June run.
Financial stocks (down 6.4%) were also hit hard (as SA Inc stocks were sold off along with SA Bonds after rating agencies expressed their concerns regarding a further Eskom funding announcement). Industrial stocks (up 1.2%) made up the only sector to post positive returns this month.
Small-cap shares (up 0.5%) had a slightly positive month while Mid-cap shares (-2.0%) and Large-cap shares (-2.6%) struggled.
South African Listed Property sector (down 1.2%) and the SA REITs sector (down 1.4%) both struggled in July as investors’ concerns regarding future earnings in SA Property continue. SA Bonds (down 0.7%) also produced a slightly negative return for the month.
The MSCI World Index (up 0.5%) ended the month up slightly in US Dollar terms while the MSCI Emerging Markets Index ended 1.1% down in US Dollar terms.
The Rand appreciated 3.3% against the Pound Sterling and 1.7% against the Euro while depreciating 0.5% against the US Dollar.
The US Dollar Gold price increased by 1.2% and the US Dollar Platinum price by 4.9% for the month. The Brent Crude Oil Price decreased 2.1% US Dollar terms in July.
