BETTER TIME FOR EQUITIES; RAND BOBS ABOUT
March saw some lift in global equity markets after a torrid start to the year. The main cause was a more dovish stance by the US Federal Reserve. After hiking rates for the first time in nearly a decade in December, the Fed at its March meeting indicated a more cautious approach by leaving rates unchanged, citing concerns about global growth mainly relating to China.
After ending the first week of trading in 2016 5.11% down, the JSE all share was up 3.07% for the quarter after firming 5.7% in March.
The better quarterly performance was the result of recovering mining stocks, with industrials also contributing.
Gold continued to outshine the rest of the market, with the gold index ending the quarter 92% higher. Harmony rose an incredible 240% over the quarter.
Banks and financials were also strong drivers, with the Fini 15 index ending the month 11.05% higher. The index rose 4.14% on the quarter.
Star performer was Sanlam, rocketing a monthly 28% in March. Old Mutual rose 10% from already high levels following its announcement to split the company into four parts.
Among banks, the recovery in Standard Bank materialised at last when it rose 21% in March to be up 16.7% for the quarter. FirstRand rose 9.11% in March and 14.16% in the quarter.
Rand hedges had a mixed month, with Steinhoff adding 23.3% on a quarterly basis following its Frankfurt listing. MTN was flat for most of the quarter, ending just 1.74% up, and Naspers took a breather, ending the quarter 2.8% lower.
The recovery in the all share coincided with a better month for developed market bourses. The Dow Jones industrial average was 7.08% firmer in March and up by 1.49% for the quarter. The FTSE added 1.28% in March, but was down 1.08% for the quarter amid “Brexit” concerns.
Emerging markets also rebounded. The MSCI Emerging Markets firmed 13.03%. It was up 5.37% in the quarter. Brazil’s Bovespa index rocketed 16.9% in March, shrugging off economic and political crises.
It was another volatile quarter for the rand but it recovered 6.4% in the month to R14.79/$ from levels generally regarded as oversold. For the quarter it eked out a 4.4% gain against the greenback. This was partly driven by a softer dollar, which made little headway on the less hawkish sentiment expressed by the US Fed. The euro strengthened 4.6% in the quarter as the European Central Bank mulled further stimulatory steps to ward off deflation in the eurozone.