South African Equities

Although still basking in the political glow of the GNU, local markets followed the international trend as the ALSI ended lower by 1.3%. Weakness was spread throughout underlying markets with the property index lower by 4.4% for the month, industrials lower by 3.1%, and financials weaker by 1.6%, though an increase in the platinum and gold prices pushed the resources sector higher by 2.3%. 

September headline inflation eased further to 3.8% YoY from the 4.4% YoY in August, reaching its lowest level since March 2021 and supporting the case for another interest rate cut at the upcoming Monetary Policy Committee (MPC) meeting in November. Core inflation remained unchanged from the August print of 4.1% YoY, with retail sales for August increasing by 3.2% YoY.

Finance Minister, Enoch Godongwana, delivered the October 2024 MTBPS, which reiterated Treasury’s commitment to fiscal consolidation and stabilising the country’s debt to GDP ratio by 2025/2026. Revisions were made to the budget forecasts of 2024, hinting at weaker fiscal ratios due to an expected shortfall in tax revenue and increased spending, while also lowering the 2024 growth forecast to 1.1%, down from the 2024 budget forecast of 1.3%.