OIG Monthly Market Review


  • Top performer for the second consecutive month was SA Listed Property Index, increasing by 4.1%,
  • The annual inflation rate lowered to 5.1%
  • The rand weakened by 1.8% against the US dollar

In January, the FTSE JSE All Share Index saw a decline of 2.9%. Small-caps surpassed both large caps (top 40) and mid-caps delivering a return of 1.7%. Meanwhile, large caps (top 40) and mid-caps experienced returns of -3.47% and -2.80%, respectively. The discretionary retail sector provided a rare bright spot among domestically focused companies. Mr Price, which increased by 9.0% particularly stood out in this group, with its latest trading update surpassing expectations, showing same-store sales up by 8.0% year-on-year.

In a broadly negative month on the JSE, property counters proved to be the exception, this positive performance was driven by the belief that local interest rates have peaked. Property stocks stood out as top performers for the second consecutive month, with the SA Listed Property Index rising by 4.1%. At the same time, the Resources Index (Resi-10), which tracks the 10 largest resources companies experienced a decline of 5.9%. Among other sectors, The Financial Index (Fini-15), which consists of the largest listed financial companies, lost 2.9% for the month, and the Industrial Index (Indi-25), consisting of industrial stocks retreated by 1.3%.

South Africa’s annual inflation rate decreased to 5.1% in December 2023, marking the lowest reading in four months. Core inflation, excluding volatile categories like food, fuel, and electricity, remained fixed at 4.5%, despite increases in housing, utilities, health, and restaurant prices.

In November, retail sales, after seasonal adjustments, declined by 0.9% compared to the same period last year, while October saw a larger decrease of 2.5% year-on-year. However, there was a positive month-on-month trend, with retail trade sales increasing by 0.4% in November.

During its initial meeting of 2024, the South African Reserve Bank (SARB) Monetary Policy Committee (MPC) opted to maintain the repo rate at 8.25%, along with the prime rate remaining steady at 11.75%, aligning with market expectations.

The rand weakened by 1.8% against a strong US dollar during the month.

In December 2023, there was a preliminary trade balance surplus of R14.1 billion. This surplus stemmed from exports totalling R164.0 billion and imports amounting to R149.9 billion.

South Africa’s tourism industry is showing significant signs of recovery, with the number of overseas travellers in 2023 surpassing the two-million mark, marking a 42.0% increase compared to 2022. However, this figure still falls short of the pre-Covid level recorded in 2019, which stood at 2.6 million. Europe continues to dominate the South African tourism industry, accounting for 64.0% of the total overseas arrivals.


  • The MSCI World index increased by 1.2% and the US S&P 500 index reached a record high of 1.6%. Chinese property giant Evergrande had a court-ordered liquidation.
  • Japanese markets were standout performers in January, with the benchmark Nikkei surging by 8.4%, achieving its strongest January performance since 1998.

Global equity markets experienced volatility and a mixed performance, with the MSCI World index gaining 1.2%. Japan, the US, and Europe maintained their upward trajectory, while China and other emerging markets (EMs), including South Africa, lagged.

Geopolitical tensions in the Middle East escalated significantly following airstrikes by the US and UK on Houthi targets in Yemen aimed at preventing attacks on ships in the Red Sea. Consequently, this event has led to the largest redirection of international trade in decades, diverting ships away from the Suez Canal to longer and costlier routes around southern Africa. The disruption to global supply chains has been substantial, resulting in a surge in freight costs.

United States (US)

In the US, amidst increased political risk, the S&P 500, Nasdaq 100, and Dow Jones 30 registered returns of 1.6%, 1.9%, and 1.2% respectively. Notably, despite this backdrop, the S&P 500 reached a record high in January. Approximately a third of S&P 500 companies disclosed their 4Q23 earnings during the month, with earnings largely unchanged on aggregate compared to 4Q22 for those companies reporting, exceeding expectations by about 6% for what was anticipated to be a soft final quarter of 2023. Tesla experienced a significant decline in January, -25% after CEO Elon Musk cautioned about subdued sales growth in 2024. Conversely, chip maker Nvidia continued its upward trajectory, up 24% for the month, building on its strong performance from 2023, despite no apparent catalyst, as earnings are scheduled for release in late February.

In late December, markets were pricing in a more aggressive interest rate cutting cycle starting in March 2024 of nearly double the United States (US) Federal Reserve’s (Fed) indication, following the Fed’s decision to maintain interest rates steady. At the meeting, they signalled only three 25 basis points cuts for 2024, as indicated by the ‘dot plot’—the Fed’s collective expectations on interest rates over time. Subsequently, financial markets scaled back their bets on interest rate cuts, with Fed funds futures now pricing in six cuts for the year instead of seven. This adjustment comes in light of stronger-than-expected payroll data and firm gains in wage inflation. Additionally, potential inflationary pressures could arise from higher costs due to disruptions in the Red Sea, triggered by Houthi militias, especially concerning given that 30% of cargo arriving on the East Coast of the US is typically routed through the Suez Canal.

December witnessed a faster-than-expected acceleration in headline inflation, as measured by the Consumer Price Index (CPI), reaching 3.4% year-over-year, while core inflation, excluding the erratic food and energy components, slowed less than expected to 3.9%

United Kingdom (UK)

In January, the UK’s FTSE-100 experienced a decline of 1.3%, marking the worst month for UK equities since October.

In December 2023, the Bank of England’s (BoE) Monetary Policy Committee (MPC) voted six to three to maintain interest rates steady for a third consecutive meeting. Despite the firm stance against discussing interest rate cuts, overnight indexed swaps suggest that markets are pricing in a more aggressive easing stance, including four cuts this year. Slower inflation and wage growth have led investors to anticipate a softer monetary policy stance. Although the UK lags behind its peer countries, significant progress has been made in curbing inflation rates. Despite an unexpected increase to 4% in December 2023, marking the first increase in 10 months, headline inflation remains substantially lower than the peak of 11.1% recorded in October 2022.


Major European markets saw gains, with Germany’s DAX rising by 0.9%, and France’s CAC Index closing 1.5% higher for January.

The European Central Bank (ECB) opted to maintain interest rates unchanged for the third consecutive meeting. According to the ECB’s latest projections, headline inflation is forecasted to average 2.7% this year, before moderating to 2.1% next year and 1.9% in 2026. Additionally, the ECB anticipates economic growth to be constrained by low export growth and tight financing conditions, with expectations set at 0.8% for this year and 1.5% for both next year and 2026.


Sentiment in Chinese markets was weighed down by the collapse and liquidation of the prominent Chinese property giant Evergrande, coupled with concerns surrounding China’s slowing economy.

The impact was evident in the punishing sell-off experienced by China’s equity markets in January, primarily driven by apprehensions over the troubled property sector. Both Hong Kong’s Hang Seng Index and the Shanghai Composite Index saw significant declines, plummeting by 9.2% and 6.3%, respectively.

To bolster the struggling equity market and fragile economic growth, the People’s Bank of China (PBoC) announced a 50-basis point reduction in the reserve requirement ratio in January 2024, injecting approximately US$140 billion into the banking system. This move aims to enhance lending capacity amid economic challenges. Furthermore, the People’s Bank of China (PBoC) introduced new policies to support high-quality real estate developers by allowing them to utilize bank loans secured against commercial properties to repay existing debts and cover operational expenses. This initiative comes in the wake of numerous developer defaults, including the largest, Evergrande, which recently faced court-ordered liquidation amid a government crackdown on excessive borrowing.


Japanese markets stood out as top performers in January, with the benchmark Nikkei surging by 8.4%, marking its strongest January performance since 1998.

Japan’s December core Consumer Price Index (CPI), which excludes volatile food prices but includes energy costs, saw a slight dip to 2.3% compared to November’s 2.5% reading, representing the slowest increase since June 2022.

In December 2023, the Bank of Japan (BoJ) signalled a potential shift towards an interest rate hike. The minutes of the meeting revealed discussions among policymakers regarding the necessary conditions for scaling back stimulus, particularly as the Bank of Japan’s (BoJ’s) confidence in its inflation forecasts has strengthened.