SA market performance and macro data:
SA equities and bonds rallied in April, while the rand gained (0.5%) against the USD and was the best performing currency of the major global markets in April. Year-to-date, the rand has depreciated by 2.9% against the US dollar.

The Capped SWIX returned to positive territory YTD (+0.3%), led by the resources sector. The All-Bond Index was up 1.4% in April and is flat year to date.
 

SA inflation outlook and drivers:
SA consumer inflation is expected to drift sideways in 2Q24 and 3Q24, before easing from 4Q24. The marked rise in maize prices has not spilled over to other food items, while the reversal of the rand and oil price spikes removes upside pressure. Food inflation and the exchange rate are the key factors to watch.
 

SA macro:
No load-shedding in April drove the increase in the ABSA PMI above 50, to 54 in April from 49.2 in March. The latest household credit growth number came in at 4.1% y/y but is still negative in real terms. Another trade surplus was recorded in March, with much lower (-26%) fuel import volumes more than offsetting the -15% export growth.
 

SA Elections:
We are monitoring the updated polling activity closely and are assessing the probabilities of three scenarios for the outcome of the South African elections. Our base case is the ANC secures around 45% of the vote and partners with a party like the IFP. Here we expect more of the same.

The negative scenario is one where the ANC obtains less than 40% and there is a shift to the left (EFF/MK) and the positive is less than 40% and a coalition with the DA. We have currently positioned client portfolios appropriately for the base-case but have investment actions prepared for either of the tail scenarios.

As always, we remain committed to providing you with the best possible investment outcomes while remaining true to our long term, well considered approach and making sure that portfolios are positioned appropriately for a variety of likely outcomes.