A Quick Look Back at the Second Quarter of 2014….

As we plunge ahead into the second half of 2014, it is worth taking a brief glance back at the second quarter, which was an interesting one on many levels.

Amongst other noteworthy events, the JSE reached, which was at the time, a record high of 51 322. Unsurprisingly, this sparked excitement among the financial community and the media.

Other significant developments included the following:

• In May, consumer inflation continued to rise, reaching 6.6% – the highest in almost 5 years!  The SA Reserve Bank’s target, it is worth noting, is 3% – 6%.

• The rand weakened slightly over the quarter, ending June at R/$ 10.64.

• Global Equity (share) markets rose in this quarter.  Emerging markets recovered from previous lows. Two factors which have driven this rally:

o A reduction of tensions between Russia and the Ukraine.
o Speculation that Chinese authorities will take steps to stimulate their economy.

With regards to JSE sector returns, the following charts giving 1-year and 10-year returns to end June 2014 are very revealing…

Sourced from Coronation Fund Managers and Momentum.