News & Publications

Africa Market and Lombard Fund News




Monthy Report- October 2018

19 Nov 2018

Poor investor sentiment left emerging assets strongly underweight in the global basket. Fund redemptions in illiquid markets forced good and bad quality risk assets even lower than last month. However, things are looking up. Reductions in the energy price and some rotation out of US assets have provided support for emerging assets towards the end of the month.

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2018

Monthly Report- May 2018

09 Jul 2018

South Africa

S&P affirmed South Africa’s sub-investment grade credit rating and kept its stable outlook. S&P rates the country’s foreign currency debt ‘BB’ and its local currency debt ‘BB+’. The stable outlook is based on the agency’s view that South Africa’s economic growth would move up over the next year following economic and social reforms undertaken by the new administration. Sentiment has turned positive on South Africa since President Cyril Ramaphosa has pledged to undertaken necessary fiscal and economic reforms. Inflation remains in the target range.

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2018

Monthly Report-June 2018

09 Jul 2018

South Africa

Its been a bit of rough sailing this past month, The rand plunged by 9% against the dollar, driven by global risk-off sentiment and poor domestic economic data. However, policymakers have openly stated that they would not act on currency moves until they see a lasting effect on domestic inflation. While the monetary authorities have cautioned for a interest rate hike, the market is not yet pricing one in. This optimism is fuelled by South Africa’s consumer price inflation of 4.4% , which is at the bottom of the acceptable inflation target band. Hence, we may have to wait for inflation to breach the target for a sustainable period before we see any reaction from the central bank

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2018

Monthly Report- April 2018

15 May 2018

South Africa

With the euphoria over the election of a new government lessen, reality about the challenges returned to the South African market. South Africa’s central bank warned that the country’s difficulties to rehabilitate state-owned companies could be a threat to its financial stability. The bank warned about the risk of further credit downgrades. SARB cited governance issues, increasing contingent liabilities and poor liquidity as risks to government finances. Solving the Eskom situation has been flagged by government officials in the past as key to avoid further deterioration. The fund remains alert to these risks, however the underweight position by global funds into South African companies remains. We expect that these funds continue to grow exposure and that this demand will underpin stocks throughout this quarter.

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2018

March-2018

06 Apr 2018

 

South Africa

As corruption charges are brought against ex-president Zuma, South African government debt is upgraded by Moody’s to stable. The agency recognising the early stage steps by the new president to reduce spending, tackle corruption and stabilise the fiscus. We agree with Moody’s actions and have increased our positions in the general industrial South African counters and initiated investments into Banks.

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2018

February 2018

16 Mar 2018

It is a new era for South Africa. Out with president Zuma and In with President Ramaphosa who pledges to reinforce South Africa’s economy and rebuild confidence. It is fair to say that investors believes that the new president is up to the task. On his first day in office the benchmark JSE Top-40 index rose 3.7% while the broader All-share index gained 3.5%, as markets in Africa’s most sophisticated economy gained ground and this was echoed by the fund also as good gains were experienced on the back of the change in government and the ZAR held its gains. The fund has increased positions in diversified industrials to profit from the renewed positive market sentiment

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2018

January 2018

07 Feb 2018

Dear Investors

As January arrived, so did some level of rationality return to investors. Volatility fell as investors digested Decembers aggressive movements. African markets showed mixed performances.

 

In South Africa it is the end of an era, As South Africa said bye to rogue president Zuma. As the new leader of the ruling party is South Africa begins to shift policy towards good governance and fiscal discipline, the relative underweight of South Africa in global investment portfolios has been given attention in the media.

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2018

December 2017 Report

16 Jan 2018

Last month, I warned that December volatility in Africa can test even the most experienced investor. These words proved even more prophetic than I had expected when I wrote the report. The volatility was precipitated by crises and surprises. The result was as roller-coaster event for fund profits.

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2018