In December, the SA Property sector was the best performing local asset class helping to recover some of its 2020 losses. With the emergence of the new Omicron variant and fourth COVID wave, the government has been relatively pragmatic in its response, by easing some restrictions and keeping the country on level 1. This has been supportive of the operations and sentiment towards this sector and others.
SA Equities performed well in December and returning 29.2% for the year. Inflation-linked bonds (ILBs) had their best year since 2012 as investors looked to hedge the increasing inflation risk. Despite the strong recovery in ILBs in 2021, they did not manage to outperform SA Nominal Bonds. With the growing favourable global risk appetite, SA Bonds ended the year strongly after a few months of being in a slump.
SA Inflation increased to 5.5% in November, its highest level since March 2017. It is expected to rise further in the coming months and subsequently trend lower in the second half of 2022. The increase in inflation was largely the result of the higher fuel price, due to the significant increase in oil price.
