By browsing our website, you accept the use of cookies. Our use of cookies is explained in our privacy policy.
Click the PRODUCTS & SERVICES button on the left to expand it again.
Ok. Got itAn overview of factors that affected South African markets during December 2021 and the latest economic growth and unemployment indicators.
A rapid escalation in Covid-19 cases confirmed the onset of the fourth wave, though the country resisted stricter lockdown measures. With data indicating a moderation of case counts in the latter half of the month, South Africa further relaxed restrictions on movement and trade, including a removal of the curfew.
The Independent Communications Authority of South Africa (Icasa) reissued the invitation to apply for spectrum in an auction of about R8 billion, planned for March 2022. After numerous delays, the conclusion of this process would be a positive development for the economy, fiscus and consumers. In a positive development, credit ratings agency Fitch moved South Africa’s credit ratings outlook to stable from negative.
The economy recorded a quarterly GDP contraction of 1,5% (not annualised) in the third quarter – disappointing relative to market expectations. The devastating impact of the riots, as well as load-shedding, were the primary drivers. The unemployment rate recorded a new high of 34,9% in the third quarter, confirming the bleak picture many job seekers face.
Both Nedbank and Investec concluded the purchase of their outstanding listed preference shares in December, driving the preference share market to a strong end to the year, with the market gaining 6,5% in December.
This brings the full-year returns to 45,0%. The All-bond Index gained 2,7% in December, bringing the returns over the year to 8,4%. After a strong start to the year, the rand experienced a much weaker fourth quarter, depreciating by circa 6,0% and breaching the R16,00 mark multiple times in the last month of the year.
Local equity markets mirrored the positive momentum of global equity markets, with the FTSE/JSE all-share index gaining 4,8%. With resources delivering performance of 32,4% over the year, South African equity indices outperformed the broader emerging-market complex, delivering returns comparable to many developed markets. In December domestically exposed small- and mid-cap counters outperformed large-cap counterparts, while interest-rate-sensitive sectors such as property and financials finished the month up 7,9% and 9,1% respectively. The standout sector for 2021, however, was the energy sector, returning 112,2%.
Disclaimer |
Nedgroup Private Wealth Pty Limited and its subsidiaries (we, us, our) have issued this communication for information purposes only, so you must not rely on it as though it is advice, without getting financial, tax or other professional advice. We collected the information in this communication from various sources, and have included facts and events or market conditions that were current at the time of going to print. We do not warrant that this information is complete or accurate, or have anything to say about whether it is appropriate for investors in all jurisdictions to use this information. The opinions and recommendations given may change without notice. We and our employees may hold securities or financial instruments mentioned in this information. This information is not an offer or solicitation of financial services or products, and we do not accept liability for any loss or damage, including, but not limited to, loss of profits or any financial or other monetary or direct or special indirect or consequential loss, however arising, whether arising from negligence or breach of contract or other duty as a result of this information being used or relied on. Nedbank Private Wealth, an authorised financial services provider through Nedgroup Private Wealth Pty Ltd Reg No 1997/009637/07 (FSP828), a registered credit provider through Nedbank Ltd Reg No 1951/000009/06 (NCRCP16), a member of JSE Ltd through Nedgroup Private Wealth Stockbrokers Pty Ltd Reg No 1996/015589/07, an authorised financial services provider (FSP50399) and a registered credit provider (NCRCP59). |