December 2020 has seen a significant increase in new Coronavirus cases around theWorld.
the 28th of December, South Africa announced new restrictions after discovering a new, fast-spreading variant of the virus. The restrictions included the banning of alcohol, the closing of beaches and setting a newer, earlier curfew. Businesses are concerned about the year ahead because of the worse than expected sales and economic participation over the December holidays. Foreign inflows helped the Rand relative to the US Dollar and globally we have seen a risk-on environment and appreciation of emerging market currencies. The Rand closed out 2020 where it started the year trading around the R14.60 mark. The SA GDP figure recovered strongly, driven primarily by household consumption and net exports. SA bonds delivered positive performances and the strong foreign demand for SA bonds pushed yields lower. ILB’s also had a strong month as inflation remains relatively low to historical levels.
The UK have since also seen some tougher restrictions as their COVID-19 cases keep rising. The U.S. surpassed 20 million cases amid the emergence of a new virus variant and a slower than expected vaccine rollout. The United States closed out 2020 with the deadliest and most infectious month since the start of the coronavirus pandemic. Developed market equities had a positive month in USD Dollars, the combination of unprecedented amounts government stimulus/liquidity and the rapid development of a COVID-19 vaccine drove an unexpectedly rapid recovery from March’s lows across equities, credit, and commodities. The JSE All Share Index (up 4.2%) is lower than the previous month. The SA Resources sector (up 9.5%) was the top performing sector of the month and SA Financials also delivered positive performances (up 8.3%), while SA Industrials detracted (down 1.0%). Mid-cap shares (up 6.6%) outperformed Small-cap (up 5.4%) and Large-cap stocks (up 4.0%).Emerging Market Equities outperformed their Developed Market peers with the MSCI World up 4.3% in US Dollar terms while the MSCI Emerging Market Index was up 7.4%.The South African Listed Property sector (up 13.7%) outperformed the SA REITs sector (up 13.1%) in December. The Rand appreciated 5.1% against the US Dollar, 2.8% against the Pound Sterling and 2.9% against the Euro. The Gold Price (up 6.6%) bounced back over the month of December, while Platinum (up 11.5%) and the Oil price (up 8.8%) detracted from last month.
