Confidence is the cheapest form of stimulus
Confidence is the cheapest form of stimulus
November was a mixed month of good and bad news for investors, as global markets posted gains to all-time record highs, while domestic factors continued to weigh heavily on local assets.
And although the Rand advanced against most global currencies, this was amidst the announcement of both S&P and Moody’s adjusting their outlook on South Africa’s sovereign debt to negative, but holding the current ratings themselves.
The concerns surrounding local GDP growth and rising unemployment, coupled with the financial malaise at SOEs and the associated debt burdens, all contributed to the ratings reviews, and worsening outlook. However, through all of this, the yields on South African bonds have remained robust and strong, pointing to sustained interest in our bond market.
While government’s various statements of intent regarding the regeneration of the economy are noble, the success of the growth and employment initiatives will be determined by their ability to make inroads into the implementation of real changes and reforms in government that will hopefully encourage the private sector. And although President Ramaphosa’s investment drive is bearing fruit, without the active participation of the broader business community, Government will not be able to turn the HMS South African Economy towards smoother waters.
The overall defensive positions held across the Octagon portfolios, along with our preference to global equities over local equities, aligned nicely to drive the funds strongly positive.
And although this year has been an enormously volatile one, the consistency of returns while avoiding the downside, means our investors are in the best positions ever – something we look forward to building on into 2020!
We wish you a safe Festive Season and December holiday, and look forward to seeing you well-rested and ready to tackle the challenges of the New Year!
Graviton
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