"Christmas begins about the first of December with an office party and ends when you finally realize what you spent, around April fifteenth of the next year"P.J O'Rourke
Market Movements 2017
The week in perspective
This is our last newsletter of 2017 and it provides an overview of market movements for the past year. It has been an eventful year for the South African economy and the country as a whole, one that was dominated by political upheaval and the actions of President Jacob Zuma and his cabal.
The JSE all-share index (ALSI) returned 17.07% for the year up to 1 December, driven mostly by Naspers – the biggest counter on the local exchange – with a massive return of 75.46%. Naspers represents 22% of the ALSI. The industrial sector returned 27.72% for the year following the stellar performance of Naspers and some of the other dual-listed counters. The resources sector returned 14.26% for the year, driven by Exxaro with a return of 72.4% and Kumba that returned a massive 104.47% for the year. The financial sector had a more pedestrian performance and retuned 6.60%, mainly because of lower than expected growth numbers out of South Africa and the downgrading of the country’s sovereign debt.
Although the rand remained vulnerable to political news and faced a period of volatility, the currency ended the year almost unchanged compared to the January figures. One US dollar fetched R13.60 in January and currently trades at R13.77. The pound performed marginally better. While one pound bought 16.66 rand in January, it currently trades at R18.51. The euro followed the pound in performing somewhat better – in January the rand-euro exchange rate was R14.45, while currently it is at R16.34.
International markets reacted positively to the global economic recovery and currently trade at mostly record highs. In the US, the S&P returned 18.02% year-to-date. In Europe, the DAX (in Germany) returned 12.08%, followed by the CAC (in France) with 9.35%. In the UK, markets were more subdued in response to Brexit uncertainties and returned 2.21%.
Asian markets recorded the best returns on a geographical basis, with the Nikkei (in Tokyo) returning 19.15% and the Hang Seng (in Hong Kong) returning 32.89%. This wraps up our overview of local and international markets for 2017.
The price of Brent crude oil jumped from $56.14 a barrel to $63.74 per barrel, which means surging fuel prices over the festive season.
We would like to thank you for your continued support in 2017 and wish you and your family a blessed festive season.
May we all have a prosperous 2018.
SECURITAS – Wealth Management