Financial Mail - Investors Monthly - - Analysis - Maarten Mit­tner

Mar­kets had a good Oc­to­ber, dis­pelling the per­cep­tion that the month is usu­ally bad for eq­ui­ties.

Eq­uity mar­kets glob­ally were sup­ported by risk-off trade fol­low­ing the dovish views ex­pressed by the US Fed in Septem­ber. Fed chair Janet Yellen sent a clear mes­sage that eco­nomic con­di­tions were not con­ducive to rate hikes at that stage — but this view was re­versed at the end of Oc­to­ber.

It led to more volatile trade in Novem­ber, but in Oc­to­ber the JSE’s all share climbed 7,40% — mainly be­cause in­dus­tri­als ben­e­fited from AB InBev’s pro­posed takeover of SABMiller, which has climbed 40% so far this year. There was some respite for the rand, which firmed 0,55% against the dol­lar in Oc­to­ber. But for the year the lo­cal cur­rency has lost 19,34% against the green­back. The ram­pant US cur­rency has mel­lowed some­what against the euro in Oc­to­ber, but has still gained 8,8% on it in the year to date.

The JSE’s all share per­for­mance con­tin­ues to be driven by a se­lected num­ber of high fly­ers, in­clud­ing Brait (which was up 100% this year by the end of Oc­to­ber) and Mondi (which has climbed 69%). Stein­hoff was up by more than 40% this year by the end of Oc­to­ber, while bank­ing group Capitec had gained 76% in that time. How­ever, re­sources re­main a hap­less bunch. Slower Chi­nese growth and the stronger dol­lar con­tin­ues to make this sec­tor one to avoid.

An­glo Amer­i­can was down 45% in the year to date by the end of Oc­to­ber, while An­glo Amer­i­can Plat­inum had lost 28%.

It was also a month to forget for MTN, which fell 11% in Oc­to­ber af­ter the Nige­rian reg­u­la­tory au­thor­i­ties fined the group $5,2bn. It was down by 28% at end Oc­to­ber.

Over­all, global eq­uity mar­kets per­formed bet­ter than in a tor­rid Septem­ber, with the Dow Jones climb­ing 8,47%. But by end Oc­to­ber, the Dow was still down 0,9% in the year to date.

There are plenty of con­cerns, most no­tably the low oil prices. The price of Brent crude dropped be­low $45/ bar­rel in Oc­to­ber, though it ended the month 2,46% up at just be­low $50. But it was still 13,5% be­low where it be­gan the year. The FTSE lifted nearly 5% in Oc­to­ber, but is still 3% weaker for the year. The Shang­hai Com­pos­ite recorded growth of 10% in Oc­to­ber and has risen 4,5% in the year to date.

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