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Market Reviews 

Market Review - Sihle Ndhlala

October 2019

Global stocks started September strongly after a rotten August, but by mid-month had begun to falter. The investment environment reflected the overall mood of caution, where political worries in the UK, Europe and Hong Kong tended to put investors on the back foot.

Ongoing concerns about the trade dispute between the US and China put a further dampener on stocks towards the end of the month. This is not to say markets were negative: just that returns were a little more subdued than perhaps many had expected.

For 2019 as a whole, investors ought to be well pleased with the performance of the Nasdaq, mainly, followed closely by other indexes in the developed world. Given all the ugly noise in the political environment, one might have expected us to be in an almighty bear market -- but as you can see from the table, quite the opposite is true!

There has been an early suggestion that emerging markets might soon fall onto the radar of the big global investment houses. It is probably too early to say right now, but September’s performance suggested that emerging markets might be receiving some interest. With a gain of 1.69% for the month, the developing world could just be showing signs of a turnaround.

In the SA market, bonds were the only asset class to show a positive return, and in fact have been the standout local performer this year. Equities were down just short of 1% in September, but held onto their 4% gains for 2019 so far. Property still has some work to do, having fallen nearly 4% this year, but at some stage it will surely turn into a buyer’s market.

On the JSE in September, some severely beaten-down sectors, including small-cap stocks, had a bit of a rebound. Industrials, healthcare, financials, and consumer services all bounced nicely, making up some ground on the savage losses incurred during the course of 2019. On the flipside, profits were taken in the year’s winning sectors, leading to falls in technology, basic materials, consumer goods and telecommunications.

Overall it was by no means a bad month. Investors would have been delighted by the earnings reported by Capitec, for instance, which helped propel the bank’s share price up 17.6% in September. It was also good to see consumer stocks rebounding, with Spar, Foschini, Shoprite and Clicks all showing handsome returns for the month -- although in the case of Shoprite one month cannot make up for the year’s bad performance.

On the downside, nobody should have been too surprised to see the falls in Gold Fields and AngloGold Ashanti -- SA’s gold stocks have been flying this year as global investors seek havens from the tumult that has been stirred up in the markets by the politicians. Sasol continues to be hammered for the losses it has occurred in its US operations.

Finally, it is worth keeping an eye on Naspers and its two spinoffs -- Prosus and MultiChoice -- as the market digests how to allocate resources between the different entities.


The fund delivered a satisfactory 1.45% return in September, driven mainly by its holdings in financials. Resources dragged the overall performance back slightly.

LONG- SHORT 140/40 (SJR)

Up 0.91%, the portfolio benefited from its positions in Capitec (+17%) and Impala Platinum (+10.2%), but previous strong performers reversed direction. Harmony Gold (-22%) and Gold Fields (-16%) were disappointing.


Bundles generally held their own in the tumult, all positive except for the momentum building block, which took a knock as investors rolled out of their resources positions and into other sectors.


The JSE Top 40 graph has a familiar look to it. The index has been churning around the 50,000 level for at least five years. Holding steady at 48,814 in September, there doesn’t appear to be any obvious reason for anyone to expect a dramatic move in either direction. For that, we have to look to the ANC’s various think tanks to see what form their promised economic stimulus might take. Let us hope for the best on that score.

JSE Top 40 Index

Source: Bloomberg

Happy investing!

Sihle Ndhlala
Junior Fund Manager



This document is for information purposes only and does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe for or purchase any particular investment. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use of or reliance upon the information. The value of participatory interests may go down as well as up and therefore is not guaranteed. The past performance is not necessarily a guide to the future performance. Emperor Asset Management is an authorised Financial Services Provider FSP 44978.



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