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August 2024 market review: South Africa
Domestic assets delivered positive but nuanced results in August. Read the latest market review.
Domestic assets delivered positive but nuanced results in August. The FTSE/JSE All Bond Index gained 2,4% over the month, benefitting from strong momentum in global bonds and cooling local inflation prints. A weaker US dollar saw the Rand appreciate by 2,1% against the greenback over the month. Local equity markets strengthened over the month, with the FTSE/JSE All Share gaining 1,4%. Interest rate sensitive financials (5,7%) and industrials (4,0%) delivered positive returns in contrast to weakness for the resources sector (-9,7%). Small cap stocks (5,4%) outperformed mid (0,4%) and large capitalisation stocks (1,0%).
The property sector continued its recovery, gaining 8,3% over the month, bringing the 12 month returns to 38,2% and making it the best performing asset class year to date with returns of 23,8%.
Headline inflation for the year to July 2024 moderated to 4,6% from 5,1% the previous month, below market expectations. This marks the lowest level since April 2021. Core inflation also declined to 4,3% from 4,5%. A decrease in fuel prices was the most significant contributor to the monthly decline, while food inflation edged lower to 3,9% y-o-y. Producer inflation for July also surprised to the downside at 4,2% from a figure of 4,6% the prior month. The SA Reserve Bank (SARB) will meet again in September, with the current backdrop bringing interest rate cuts into focus.
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