Continued concerns around slower global growth and escalating trade wars saw investors flock to safe-haven assets (such as US and Japanese Treasuries) in May while global risk assets (especially Emerging Market equities) took a knock. Despite a weakening Rand and increasing fiscal headwinds, local bonds managed to produce positive returns (partly thanks to lower inflation forecasts from the Monetary Policy Committee and a slightly dovish Reserve Bank keeping the repo rate unchanged at 6.75%).
The JSE All Share Index (down 4.8%) was unbale to continue its positive returns of the previous five months. Small-cap shares (-2.7%), Mid-cap shares (-3.5%) and Large-cap shares (-5.1%) all posted negative returns for the month. Industrial stocks (-6.0%) struggled the most in May followed by Resource stocks (-5.1%) and Financials (-2.3%).
As risk assets all around the globe took pain, both Developed and Emerging market equities struggled in May (although Emerging Markets struggled slightly more). The MSCI World Index ended the month down 5.7% in US Dollar terms while the MSCI Emerging Markets Index lost 7.2% in US Dollar terms.
South African listed property (-0.9%) was also not able to withstand the risk-off trade (although it only had a slightly negative month). SA REITs were slightly worse off, losing 1.4% in May.
Although the Rand appreciated 1.9% against the Pound Sterling , it depreciated 3.5% against the US Dollar and 1.3% against the Euro.
The US Dollar Gold price increased by 1.8% as investors sought safety while the US Dollar Platinum price (down 10.8%) lost significantly. The Brent Crude Oil Price decreased 11.4% US Dollar terms in May.
