Global business investment growth. Wealth concept. Gold sand running through the shape of modern hourglass with world globe crystal glass and US dollar coins on blue reflective table.
The local market recovered in line with global trends during July, up by just over 4% for the period. Sectors showing strength during that time were the property sector, up almost 9% for the month, followed by industrials (up almost 6%) which benefitted from perennial favourites Naspers and Prosus, as well as Richemont. Financials, which were up almost 4% and resources, up just under 1%, also performed strongly.
In corporate action, MTN announced that it was in talks to acquire Telkom, which saw its share price rally just over 19% for the month. FirstRand Ltd formally extended an offer to buy back all their outstanding listed preference shares, which helped the asset class gain just under 7% for the month.
From an economic perspective, the SARB increased rates by 0.75%, the sharpest hike in almost 20 years, as headline inflation (CPI) printed at 7.4% for June vs. the previous 6.5% for May. The main contributors to the rise in the inflation rate were the usual suspects of food and non-alcoholic beverages, transport, housing and utilities. The print for core inflation (which excludes the volatile sectors mentioned above) came in at 4.4%, a moderate increase to the previous (May) reading of 4.1%, and below the SARB’s target point mid-range. PPI also continued to exert a strain on producers, increasing by 16.2% over the year. We also saw a lacklustre increase in retail sales of 0.1% for May, vs. the revised number of a 4.3% increase in April.