Anglican Church of Southern African

Monthly Investment Report - Pension Fund

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March 2019

Last year ended on a volatile note as global growth concerns, geopolitics and
uncertainty regarding global trade policy sent markets gyrating. Local equities fell in
line with global sentiment, bringing the year's losses to -8.5%. The local bourse
managed to reverse last month's declines with the FTSE/JSE All Share index gaining
4.2% for the month. On a sector basis, the Resource 20 Index returned an impressive
12.5% for the month while the Industrial 25 Index gained 2.7%. The Financial 15 Index
was up 1.2% during the same period, while the S.A. listed Property Index extended last
month's losses to finish -1.0% in negative territory and bringing the year's return to -

For the month, the rand depreciated 3.4% against the U.S. dollar and traded 15.9%
weaker against the greenback for the year. Despite rand weakness, local bond yields
traded weaker, tracking lower global bond yields. Bond prices received some support
during the month, as reflected in the All Bond Index (ALBI) which returned 0.6% for the
month, along with cash. For the year the return on vanilla bonds (as mirrored in the
ALBI), was up 7.7% - only just outperforming cash which gave back 7.2%.

On the data front, growth figures released by Statistics South Africa confirmed that the
country had exited a technical recession in the third quarter. GDP grew 2.2% quarteron-
quarter, while the second quarter contraction was also revised higher. On the
production side, higher contributions to growth in several industries – most notably in
manufacturing, transport and finance - were enough to lift economic growth into positive

The transport sector surprised on the upside with the rebound more than likely linked
to the improvement in freight-services demand in the trade and manufacturing
sectors where activity turned positive. On the expenditure side, household and
government consumption increased by 1.1% and 2.2% quarter-on-quarter

Consumer spending (one of the main drivers of economic growth) was off to a good
start in the final quarter of the year. The print surprised on the upside as retail sales
growth accelerating to 2.2% in October (from 0.6% in the previous month). The rise
was mainly driven by strong sales growth in the 'textiles, clothing, footwear and
leather goods', 'household furniture, appliances and equipment' and all 'other' retail

Consumer inflation lifted marginally from 5.1% in October to 5.2% in November which
was in line with expectations. Increases in the contributions made by alcoholic
beverages and tobacco as well as miscellaneous goods and services were
responsible for the marginal rise. Contributions by all other categories remained unchanged compared with October.

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