South Africa’s new Government of National Unity cabinet boosts markets

South Africa now has a Government of National Unity (GNU), with President Cyril Ramaphosa announcing a cabinet of 11 political parties, including the ANC, DA, and IFP. Enoch Godongwana remains the Finance Minister and DA leader John Steenhuisen is the new Minister of Agriculture. The GNU aims for rapid economic growth and good governance. Following the announcement, the JSE jumped 700 points (1% increase), with stocks like Redefine Properties, Motus, and Remgro leading gains. The rand also strengthened, briefly breaching R18 to the dollar.

[Source: Moneyweb]

Clicks to sell Unicorn Pharmaceuticals following court ruling

Clicks will sell its shareholding in Unicorn Pharmaceuticals following a March 2023 Constitutional Court ruling that barred it from owning pharmacies and manufacturing medicine. This decision came after an eight-year legal challenge by the Independent Community Pharmacy Association. The Department of Health halted new pharmacy license applications until Clicks complied. The Director-General accepted Clicks’ proposal to divest on June 27, 2024. The sale, expected to be completed by the end of July, boosted Clicks’ share price by 2.3%. CEO Bertina Engelbrecht welcomed the resolution, anticipating a positive market impact.

[Source: Moneyweb]

Growthpoint targets R4-billion property disposals in a two-year plan

Growthpoint Properties, South Africa’s largest listed property company, plans to dispose of R4 billion in property assets over the next two years as part of a capital recycling programme. The company will invest around R2.3 billion in its core portfolio and R1.6 billion in new assets, focusing on logistics properties. This move aims to simplify its business and improve the quality of its portfolio. Growthpoint reported reduced office vacancies, particularly in Sandton, and a gradual improvement in office market sentiment. However, bureaucratic delays have affected the anticipated value of disposals. Despite challenges, the company remains optimistic about its portfolio’s recovery and stability.

[Source: Moneyweb]

South Africa to lose 600 high-net-worth individuals in 2024

According to Henley & Partners’ Wealth Migration Report 2024, South Africa is set to lose 600-dollar millionaires this year due to emigration. This contributes to the global record high of 128,000 millionaires expected to relocate in 2024, surpassing the previous record of 120,000 in 2023. The report notes that South African millionaires are among the top 10 nationalities expected to migrate, with leading destinations including the UAE, the US, Singapore, Canada, and Australia. The UAE is projected to attract a record 6,700 high-net-worth individuals, largely from the UK and Europe, due to its zero-income tax and luxury lifestyle.

[Source: Citywire]

Market moves

The South African rand surged on Monday and briefly breached R18 to the dollar after President Cyril Ramaphosa announced a new cabinet aimed at sustainable growth. The rand gained 1.1% to reach R17.98 to the dollar by 9 a.m., leading emerging-market currencies. The reappointment of Enoch Godongwana as Finance Minister signalled fiscal stability, boosting investor confidence. The inclusion of Democratic Alliance members in the cabinet, including John Steenhuisen as agriculture minister, contributed to the rally. The rand and South African stocks have benefited from the post-election political landscape.

[Source: Moneyweb]

The week ahead

Today, the Eurozone will announce its Consumer Price Index (CPI), while the United States will report on Total Vehicle Sales. Wednesday brings South Africa’s Total Vehicle Sales and the United States’ Trade Balance and Non-Manufacturing Employment figures. Thursday features the United Kingdom’s General Election and Japan’s Household Spending data. Finally, on Friday, South Africa will release its Foreign Reserves, the United States will disclose its Unemployment Rate, and the Eurozone will report Retail Sales.

[Source: Economic calendar]

Market Performance as at 28 June 2024

TWTW 2 July 2024

Source: FundFocus. Data as at 28 June 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.