Market Flash Report November 2022

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5 December 2022
Despite facing unprecedented power cuts, the manufacturing sector created the most jobs, the sector added 130 000 in jobs in the quarter.

The Good

The JSE ended November with a bang, the local bourse was up more than 12% for the month, and this reversed all the losses suffered throughout the year. The local market has driven my consumer discretionary which was up nearly 24%. Tech giants Naspars and Prosus were both up 39% for month, as the Chinese heavyweight, which Prosus has a 28% stake reported on better than expected results.

Despite the South African unemployment rate still at unsustainable levels, the unemployment rate dropped by 1% to 32.9%. The recent data also shows that 204,000 jobs were gained between the second and third quarters. Despite facing unprecedented power cuts, the manufacturing sector created the most jobs, the sector added 130 000 in jobs in the quarter.

Our funds performed extremely well in absolute terms, our flagship fund the OUTModerate fund managed to gain 7.5% in November and beating 98% of peers. This is as global markets and local strongly recovered in November.

The Better

Even though the SARB delivered its 7th consecutive rate increase , the SARB sounded more dovish as 2 out of the 5 MPC members voted for a 50 basis points hike. Signaling that the bank of last resort will start easing its aggressive stance.

US inflation eased in October, as the yearly rate of inflation slowed to 6% in October from 6.2% in the prior month and a 40-year high of 7% in July. The FED’s chair J-Powell signalled that the FED will start to ease the aggressive rate hikes. Signalling that the next FED hike will be a 50 basis point hike rather than the 75 we have been accustomed to.

The Rand gained some ground in November, the Rand gained 6% when compared against the greenback. Commodities such as gold got their shine back, the yellow metal gained 6% in November  .

The Bad

South Africa’s President Matamela Ramaphosa is embroiled in what is believed to be his toughest political scandal. A panel led by former Chief Justice, Justice Ngcobo found the President has a prima facia case he has to answer. This can derail South Africa’s reform agenda which the president was championing. As the ruling party  gears up for its national conference where Ramaphosa is expected to elected for a 2nd term.

The cryptocurrency market has lost more than $1.4 trillion in value this year as the industry has been plagued with problems from failed projects to a liquidity crunch, exacerbated by the fall of FTX.

South Africa’s state-owned utility continued implementing rolling blackouts as the state utility failed to keep up with demand. Eskom’s CEO also blamed sabotage on the company’s infrastructure for the continued blackouts

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