In March developed market equities mostly bounced back to levels seen at the beginning of Russia’s invasion of Ukraine. Investors are returning to the equity market for protection against inflation. The US Federal Reserve has approved a 25-basis point hike, its first interest rate increase in more than three years. The committee also indicated that there will be increases at each of the six remaining meetings this year, pointing to a consensus funds rate of 1.9% by year’s end. SA bonds and equities held up well in March outperforming their emerging market counterparts. The Rand performed strongly in line with most other commodity currencies. The Monetary Policy Committee of the SARB hiked the repo rate to 4.25% in March, its 3rd consecutive 25 basis-point increase. Inflation forecasts for 2022 increased to the upper limit of the 6% inflation target due to elevated food and fuel prices.
The JSE All Share Index ended the month flat (up 0.01%).
SA Financials (up 12.0%) delivered positive returns, while Resources (down 1.1%) and Industrials (down 4.3%) detracted.
Small-caps (up 4.8%) and mid-caps (up 6.3%) delivered positive returns for the month, while large-caps (down 0.8%) detracted.
Emerging Market Equities underperformed their Developed Market peers with the MSCI World up 2.8% in US Dollar terms, while the MSCI Emerging
Market Index down 2.2%.
The S&P SA REIT sector (up 6.0%) outperformed the SA Listed Property sector, ending up 5.1%.
Inflation Linked Bonds (down 0.7%) underperformed the SA Nominal Bonds (up 0.5%) as investors seem less concerned of an inflation breakout.
The Rand strengthened against all major currencies, relative to the US Dollar (Rand appreciated 5.4%), the Pound Sterling (Rand appreciated 7.2%) and the
Euro (Rand appreciated 6.3%).
The Brent Crude Oil price (up 6.9%) had a strong month, followed by Gold (up 2.6%) while Platinum (down 4.4%) detracted.
