June 2024
Following the May elections, the African National Congress (ANC) lost its parliamentary
majority for the first time in democratic history, dropping from 57.6% in 2019 to 40.2%
of the vote in 2024.
The end of the second quarter of 2024 marked a pivotal point in South African politics,
with the formation of a Government of National Unity (GNU) after extensive coalition
negotiations. On 30 June 2024, President Cyril Ramaphosa announced his Cabinet
and Deputy Minister appointments.
June was a favourable month for South African equities and fixed income. The local
equity market maintained its positive momentum, with the ALSI index returning 4.1%
in June and 5.8% YTD. The Resources Index experienced a negative month, posting -
3.7%, bringing its YTD return to 4.3%. Conversely, financials had a strong turnaround,
with the Financials Index returning 14.5% in June and 8.8% YTD. Property stocks were
also up 6.0%, resulting in a 9.5% YTD return.
The ALBI Index delivered a return of 5.2% in June, bringing the YTD return to 5.6%.
While cash remains attractive, it is no longer outperforming bonds YTD. The Stefi
Index delivered a return of 0.6% in June, standing at 4.2% YTD.
On the macroeconomic front, South Africa's May headline inflation, measured by the
Consumer Price Index (CPI), remained at 5.2% year-on-year (YoY), unchanged from
April.
Core inflation, which excludes volatile price categories such as food, fuel, and
electricity, stayed at 4.6% YoY, aligning closely with the South African Reserve
Bank's (SARB) target midpoint of 4.5%. The SARB's Monetary Policy Committee
(MPC) is set to convene on 18 July.
