Market Watch for September 2023

South African Equities and Bonds Outperform Global Markets in September.

South African equities and bonds outperformed their global counterparts in September, despite the challenging market environment. The ALSI fell 2.3%, while SA bonds lost 2.5%. These losses were marginally better than the MSCI ACWI and the WGBI, which fell 4.7% and 3.4% respectively (in ZAR terms).

The resource sector was the best-performing equity sector in September, gaining 0.8%. This was driven by rising commodity prices, particularly oil. AngloAmerican (+3.4%), Sasol (+11.5%), Glencore (+6.9%), and Thungela (+23%) were among the top contributors to the ALSI’s performance.

Technology (-6.3%), telecommunications (-5.5%), and consumer services (-5.0%) were the worst-performing equity sectors in September. FirstRand (-13%), Naspers (-6%), Goldfields (-14%), and Richemont (-12%) were among the biggest detractors to the ALSI’s performance.

The relatively strong performance of South African assets in September may be attributable to two factors:

  1. Strength of commodities: Commodity prices, particularly oil, rose sharply in September. This benefited South African companies with exposure to the commodity sector, such as AngloAmerican, Sasol, Glencore, and Thungela.
  2. Better-than-expected GDP data: The South African economy grew by 1.6% year-on-year in the second quarter, much faster than expected. This suggests that the economy is more resilient than some had feared.

Overall, the South African stock and bond markets had a challenging month in September, but they outperformed their global counterparts. Investors should continue to monitor the global economic outlook and interest rates closely.

To find out more about the current market situation, read the Market Watch for September 2023 below:

Missed last month and need to catch up? Read the August market watch here.