This is our first newsletter of 2018. The last time we communicated, Jacob Zuma was still the president of the ANC and Steinhoff was a reputable company listed on the JSE. Former British Prime Minister Harold Wilson once said a week is a long time in politics, and it would seem that December of 2017 was a long time politically and economically for South Africa. 

We kick off the new year by providing a recap of market performances for 2017. The JSE all-share index (alsi) returned 20.95% for the year, a stellar performance considering an array of political uncertainties. The industrial sector contributed 25.42%, mainly because of the sound performance of Naspers – the largest counter of the index. The financial sector returned 24.38%, while the resources sector returned 16.77%.

As far as the local currency is concerned, the rand strengthened from R13.37 to R12.37 against the USD. The SA currency traded almost unchanged against the pound and lost 42c in value against the euro to trade at R14.86 at year-end. It should be noted that most of the recovery in the currency came after the ANC electoral conference, indicating that international markets support the new ANC president.

In general, the commodity market performed better in 2017 than the previous year. The price of gold moved from $1150 to $1296 per ounce, 12.96% higher; while platinum traded 2.21% higher, moving from $907 to $927 per ounce at year-end. The Brent crude oil price increased from $56.82 to $66.52 per barrel.

International markets also performed well in the wake of a global economic recovery. The S&P Index gained 19.42%, followed by the Nikkei 225 with a return of 16.18%. Europe’s best performing market was the DAX in Germany, with a return of 15.98%, followed by the CAC in France that returned 9.26%. In the United Kingdom, the FTSE returned 7.63%, while the Shanghai composite returned 6.56%.

Next week we will return to our usual newsletter format. In the meantime, we trust that 2018 will be a prosperous year for all our readers.

Johan Steyn

Regards,

SECURITAS – Wealth Management