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South African markets endure third consecutive monthly decline; gold miners and certain retailers buck trend

EditorAmbhini Aishwarya
Published 03/11/2023, 12:50
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Global equity markets, symbolized by the MSCI World, have marked their third consecutive month of decline as of October 2023, dropping by 2.9% month-on-month and nearly 10% since the end of July. This trend was also mirrored in the JSE and FTSE/JSE Capped SWIX Index, which experienced a year-to-date decrease of 3.2%. On the other hand, gold miners saw a surge of 21% month-on-month, following a 7% rise in gold prices in October.

South African retailers Tiger Brands and Clicks also resisted the downward trend. Tiger Brands showed positive momentum under new management, while Clicks reported robust earnings for 2023. Conversely, Pick n Pay reported a loss for the first half of 2024 and skipped its interim dividend. Telecommunications company MTN faced challenges with Nigerian tax demands and a depreciating Nigerian currency.

South Africa's headline inflation rate climbed to 5.4% year-on-year due to escalating food and energy prices. In contrast, core inflation receded to 4.5% year-on-year. Despite a robust US dollar, the South African rand appreciated by 1.5% month-on-month in October, although it weakened year-to-date against the dollar by 8.6%.

The country's long-term borrowing rate saw a slight decline to 12.3% per annum in October. Meanwhile, US 10-year government bond yields rose to a 16-year high of 5%. The global stock sell-off also affected bonds and real estate, with the Bloomberg Global Bond Index and the FTSE/NAREIT Global REIT Index down by 1.2% and 4.8% month-on-month respectively.

In the United States, September retail sales grew by 0.7% month-on-month, and third quarter GDP data showed an unexpected growth of 4.9% quarter-on-quarter, defying slowdown expectations. Major stock markets reported losses, and the MSCI Emerging Markets entered negative territory with a drop of 3.9% month-on-month.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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