Equities offer best returns in January

SA equities strongly outperformed listed property in January, with various blue chip property stocks’ share prices having come under pressure.

According to Catalyst Fund Managers, equities as measured by the all share recorded the highest total return performance of 4.3% for the month, followed by the FTSE-JSE SA Listed Property index (Sapy), which only managed 1.6%.

SA bonds were in third place with 1.4% and cash lagged behind with a 0.6% total return.

Growthpoint, the largest South African-based Real Estate Investment Trust (Reit) with a market capitalisation of R74bn, mustered a total return that came to only 1.58% while Redefine Properties, the secondlargest Reit, registered a negative return of 0.45%.

On a 12-month basis, listed property has delivered a 15.4% total return, outperforming bonds with 11.9%, equities with 10.3% and cash with 7.5%.

The Sapy ended the month on a historic yield of 6.53%, The yield-to-maturity on the Long Term Government Bond (R186) ended the month at 8.84%.

Catalyst said the weak growth environment “seems to be weighing in on retailers”.

Given the recent trading updates it would seem retailers were finding it challenging to capture the benefit of high inflation as consumers were already stretched, said Catalyst.

The South African Property Owners’ Association recently reported that shopping centre trading density growth, despite rising 5.4% year on year in the last quarter of 2016, was down from a revised 6.4% year on year for the preceding quarter.