Bourse bucks emerging markets trend

Despite low GDP growth and relatively high inflation, SA’s high interest rates and bond yields still offer good investment opportunities, analysts say.

Although the all share started the second part of the year on a negative note, closing 0.78% down on Monday, it ended the second quarter 3.85% higher at 57,610.9 points, after retreating 6.7% in the first quarter.

The Shanghai composite lost 10.14% in the second quarter, and the Brazil Bovespa 14.7%.

The all share is still 4% down in 2018 after reaching a record close of 61,595.85 points on January 26 as Ramaphoria gripped the country.

The MSCI emerging markets index is down 7.68% in 2018, with the Shanghai composite having fallen 14.95% year to date and the Brazil Bovespa 4.76%.

Analysts expect the JSE all share to grow only marginally in the second half of the year. There are too many global uncertainties for the JSE to grow strongly over the period, while the subdued conditions in the local economy are an added risk, they say.

Capital Economics predicts that the all share will not pass its previous high in the next two years, ending 2018 at about 59,000 points, reaching 59,500 by the end of 2019 and 60,000 in 2020. That implies nominal growth of about 5% per year, compared to 17.47% growth recorded in 2017.