Investment Market Update

MAY 2023

What has been happening in local & global markets in the month of May



Rands per US Dollar, was the highest level reached this month


The SARB hiked rates by 50bps

6.8% YoY

SA inflation rate cooled to its lowest increase in a year



Sentiment towards SA investments soured as the economic outlook deteriorated due to protracted power outages and the perception of political alignment with Russia.

In light of increased loadshedding and geopolitical woes, investors weren’t encouraged to place their money in our markets as bonds and equities didn’t perform well. Such incidents caused severe weakness in the ZAR year to date compared to both developed market and emerging market currency peers.

Poor sentiment towards South Africa hammered the property sector and inflation linked bonds, while nominal bonds experienced their fourth worst month in over 22 years. 

South African equities, and particularly those stocks exposed to the SA economy, were hard hit in the month as the news flow turned from bad to worse and trading updates confirmed what was feared. Within local equities, the financials sector saw steep outflows with the local rand sell-off with such losses in the rand flattering returns for offshore asset classes with global equities performing the best as index returns in hard currency were driven up by mega cap companies.




Red was the colour of the month, as global financial markets across the board experienced a tough May. The US debt ceiling impasse garnered most of the market’s attention this month, an impasse that was positively resolved late in the month.

Most major equity indices fell, and core bond markets lost ground as yields drifted higher. The risk-off sentiment is highlighted in the US, with investors
cautious about equities in the face of high valuations and uncertainty surrounding the debt ceiling.

Elsewhere, and as expected, the Bank of England and the ECB both raised interest rates by 25 basis points to continue to put downward pressure on inflation. Unfortunately, the data continue to show that inflation remains stubbornly high in both the UK and EU and indeed most developed economies.

The divergence noted in previous months between the strength in services sectors and weakness in manufacturing sectors continued to widen. Markets were more mixed over the month, with several developed equity markets (with the notable exception of Japan and a lesser extent the US) falling in local currency terms whilst bonds also fell.




  • The JSE All Share Index dropped last month (down 3.9%).
  • Resources (down 2.2%) and Industrials (down 3.3%) lost ground, while Financials (down 7.9%) plummeted.
  • Small-caps (down 5.1%), Mid-caps (down 7.7%) and Large-caps (down 3.5%) fell deep into the red.
  • The S&P SA REIT sector (down 9.6%) and the SA Listed Property sector (down 5.3%) ended the month far into negative territory.
  • SA Nominal Bonds (down 4.7%) dropped further, while Inflation Linked Bonds (down 2.2%) ended the month lower.
  • Developed Market Equities slightly outperformed their Emerging Market peers in US Dollar terms, with the MSCI World Index down 0.9% and the MSCI Emerging Market Index down 1.7%.
  • The Rand depreciated against the major currencies; relative to the US Dollar (Rand depreciated 8.4%), the Euro (Rand depreciated 4.7%) and the Pound Sterling (Rand depreciated 6.9%).
  • The commodities sector had a largely negative month, with Platinum (down 7.5%) and Brent Crude (down 8.6%) posting large losses, while  Gold (down 1.3%) ended marginally lower.