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 (JO:TBSJ) and Clicks (JO:CLSJ) also resisted the downward trend. Tiger Brands showed positive momentum under new management, while Clicks reported robust earnings for 2023. Conversely, Pick n Pay (JO:PIKJ) reported a loss for the first half of 2024 and skipped its interim dividend. Telecommunications company MTN (JO:MTNJ) 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.