Financial Mail - Investors Monthly - - Contents - Maarten Mittner

Global mar­kets boosted by Fed’s de­lay in hik­ing rates

The JSE had a neg­a­tive March but a rel­a­tively bet­ter month than some global mar­kets, drop­ping 2,18% com­pared to a 4,3% fall in In­dia and a 2,5% drop in the FTSE 100 over the pe­riod. The Dow Jones industrial av­er­age was 1,97% lower in the month, and 0,26% down since the be­gin­ning of the year.

The S&P 500 edged up 0,44% over the year, but was 1,74% lower over the month as Amer­i­can mar­kets ap­pre­hen­sively eyed first quar­ter earn­ings. The high av­er­age val­u­a­tions of US eq­uity mar­kets will have to be jus­ti­fied by com­pany earn­ings, which are al­ready un­der pres­sure from the stronger dollar.

The JSE was mainly sup­ported by in­dus­tri­als, with the Indi 25 up 6,2% since the be­gin­ning of the year but los­ing some trac­tion in March.

Naspers hit record highs in March, gain­ing 23,4% in the month, and rand hedges ben­e­fited from the weaker rand, but di­ver­si­fied con­glom­er­ate Rem­gro dragged the in­dex down, los­ing 4,04% in March.

The Fini 25 in­dex ended the month 1,60% higher and is 9,8% up for the year.

The main rea­son for the rise in global mar­kets has been the US Fed’s ex­ten­sion of the date for the en­vis­aged in­ter­est rate hike cy­cle to com­mence.

The mar­ket first pen­cilled in June for the move, but now the con­sen­sus date is Septem­ber.

Emerg­ing mar­ket sen­ti­ment was sup­ported by fur­ther stim­u­la­tory mea­sures an­nounced in Europe by the Euro­pean Cen­tral Bank, and in China.

In Asia, the Shang­hai stock ex­change was the star per­former, climb­ing 14,7% in the month. The in­dex is 17,7% up so far this year. The Hong Kong Hang Seng added 0,97% in March and is 6,18% up on the year.

Among in­di­vid­ual shares on the JSE, re­sources were the dogs and banks the stars.

High-fly­ing smaller bank Capitec ended the month 28,1% up. Stan­dard Bank rose 17,09%.

It was an­other bad month for the rand. The lo­cal cur­rency weak­ened 3,5% against the dollar, which sta­bilised against the euro but is still 6,8% stronger against the Euro­pean cur­rency so far this year. Com­mod­ity prices con­tin­ued to weaken, with plat­inum drop­ping 3,93% and gold fall­ing 2,11%. Lit­tle sup­port for Brent crude prices was ev­i­dent in the month, as the price fell 11,2% af­ter re­cov­er­ing from six-year lows in Fe­bru­ary.

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