June 2023 Update
F&A Monthly Update | June 2023
Time for another monthly update! As always, we've put together a snapshot of market insights from PortfolioMetrix to bring you an overview of where your investments are headed. Here's your June 2023 update!
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Richard and the F&A team
June 2023 Update
This month's piece is compiled by Liam Dawson, Portfolio Manager & Investment Analyst - PortfolioMetrix.
GLOBAL UPDATE
In a relatively light month of market-moving news headlines capital markets saw strong returns across the board thanks to economic data releases, which took centre stage. These showed global economic activity slowing somewhat, although still at levels indicating positive growth. Lower than expected inflation in the US and euro area gave these markets a boost and reinforced optimism that the end of the rate hiking cycle is near. This, however, did lead to a further rise in short-end bond yields, riskier bond spreads narrowed, and their prices rose. A glimpse of easier monetary policy benefitted growth equities, particularly in the US. The UK was an outlier, however, as inflation surprised to the upside again. This spurred the Bank of England into a larger than expected rate hike of 0.5%.
LOCAL UPDATE
June was largely a good month for South African investors as the weakness of May unwound in both the currency and bond markets (the rand moved from R19.76/$ to R18.85/$). The partial reversal also saw the Financials super-sector (11.7%) outperform Industrials (3.7%) and Resources (-7.6%). Further good news saw loadshedding ease, inflation trend lower and closer to the SARB’s target band, a slight surprise in GDP growth (albeit at low levels), and most helpfully a settling global macro environment. In the same vein, the sour perception of South Africa’s political alignment seems to have sweetened slightly following the African peace mission to Russia and Ukraine, additionally President Ramaphosa has been absolved of responsibility in the Phala Phala saga by the acting Public Protector advocate Kholeka Gcaleka.