Monthly Market Update – 11/2021
South Africa kicked off an eventful November with its sixth municipal elections. The results delivered many surprises as the ANC vote dropped to record lows. Just 46% of registered voters turned out to vote, and for the first time, support for the ANC dropped below 50%.
Finance Minister Enoch Godongwana presented his first Medium-Term Budget Policy Statement, posting an improved outlook to the February budget. The country experienced yet another bout of loadshedding around mid-month with nearly four days of Stage two loadshedding.
At its Monetary Policy Committee meeting on the18th of November, the Reserve bank decided to raise the repo rate by 0.25% to 3.75% from its record low, its first repo rate hike in three years.
At the end of November, a team of South African researchers announced that they had detected a new variant of Covid-19, now called Omicron. The emergence of the new Covid-19 variant unsettled markets in November and as infection rates increased, investors became concerned that economic activity will slow.
Federal Open Market Committee (FOMC) chair, Jerome Powell, announced early in November that the Fed would start shrinking the size of its bond purchases by USD 15bn per month. Energy prices fell substantially in November.
The Turkish Lira made headlines in November as it plummeted almost 30% to an all-time low after Turkish president Erdogan stated he was against any rate increases, leaving the Lira 45% lower against the US dollar year-to-date. Turkey’s inflation is now almost 20%, and the President has fired three central bank chiefs because they did not align with his desire to keep interest rates low.
The US unemployment rate fell sharply to 4.2% in November, down from 4.6% in October and 6.3% at the start of the year. Retail sales have been growing for several months and industrial activity remained in expansionary territory for November.
The above information is only for informative purposes and cannot be seen as advice as defined in the Financial Advisory and Intermediary Services Act, 37 of 2002. Although the necessary measures were taken in the preparation of this document, RiG Advisory Services (Pty) Ltd cannot be held responsible for any actions taken as a result of this document. Consult us for personal advice that will be appropriate for your unique circumstances. RiG Advisory Services (Pty) Ltd is an authorised financial services provider (FSP number: 44730).