JSE, RAND START WELL AS EUROPE TICKS UP

anuary was not a positive month for US equity markets, as it remained unclear when the US Federal Reserve would hike rates. The Dow Jones industrial average fell 3.69% and the S&P 500 lost 3.10%.

In contrast, European markets had a good month in anticipation of stimulatory measures in the eurozone, which were announced at month-end. The German DAX was 9,06% up and the Paris CAC 40 gained 7,76% in January. The UK FTSE 100 added 2,79%.

The JSE benefited from Europe’s uptick, gaining 3,22% after a volatile December. The main drivers were financials and banks, with the Fini 25 index gaining 4,29%. The resources sector showed signs of revival, but analysts have cautioned it could be too early to plunge into the sector as Chinese GDP growth is veering structurally lower.

The JSE top 40 ended the month 2.76% higher and the industrial index added 3,11%, mainly driven by Naspers, now third in market cap on the JSE after British American Tobacco and SABMiller.

Many investors focused on Sasol, which lost 50% in 2014 as global oil markets fell. The price ended 0,22% up.

Emerging markets had a mixed and volatile month. After tumbling earlier, the Russian Micex recovered 18,20% in the month. The Brazilian Bovespa lost 6,20%. But global investors reacted favourably to the Indian growth story and the NSE stock exchange index was 5,41% firmer.

The Brent crude price fell 9,28% in the month, but showed indications of stabilising around $50 a barrel after hitting a six-year low of $45 in December.

Gold stocks rebounded in response to uneasiness about the loose monetary policies of central banks. AngloGold Ashanti was the star among the bigger gold shares, gaining 39,28%.

The gold price firmed 7,65% and platinum rose 1,36%. But mining shares were the big losers on the JSE in January. Anglo American lost 9,12% and Kumba Iron Ore shed 7,17%.

Naspers was up 13,68% and Mediclinic gained 14,95%. Retailers did well because the Reserve Bank kept interest rates unchanged. Woolies added 12,43% and Mr Price 12,67%.

Rand hedges had a mixed month. Richemont lost 8,86%, but SABMiller firmed 3,93%.

Concerns over the global economy did not have much impact against the rand. The local currency was 0,58% stronger against the dollar in the month even though the dollar was nearly 7% stronger against the euro.