Looking Back at 2015 Which Was a Volatile Year for Global Stock Markets

Now the dust has settled on 2015, the only thing that is surprising is that our local stock market did not take a bigger hammering.  During 2015:

  • The US dollar rocketed.
  • Commodity prices fell with platinum and oil prices reaching all-time lows.  Although gold performed better than oil and platinum it was still down 10.6% year on year (YoY).    The price of gold has been on a downward trajectory since late 2012, after reaching a record high in 2011.
  • China, the world’s second biggest economy continued to slow.
  • There was a sell-off in emerging markets on the back of the falling commodity prices and they were vulnerable throughout the year (SA is classified as an emerging market).
  • The financial crisis in Greece impacted global markets.
    The European Central Bank (ECB) launched a EUR1.1 trillion stimulus package.
  • The US Federal Reserve raised interest rates for the first time in almost 10 years.
  • Geopolitical concerns did not help (e.g. the ISIS attacks in Paris; the shooting down of a Turkish warplane by the Russians near the Syrian border …)

Locally SA was confronted with:

  • Electricity shortages, high unemployment, low global demand, falling metal prices and a drought.
  • President Jacob Zuma’s surprise removal of former finance minister Nhlanhla Nene who was initially replaced by David van Rooyen, before the reinstatement of Pravin Gordhan which  had an enormous negative impact on the local market.
  • In December, ratings agency Fitch lowered SA’s sovereign credit rating to BBB- and Standard & Poor’s revised its forecast for SA, lowering its outlook to negative.
  • The local mining sector struggled as key commodity prices fell and production was hampered by power shortages and strikes or the threat thereof.
  • The resource index (RESI-10), down by 39.4% year on year (YoY) was the worst performer;   the financial index (Fini-15) lost 2.6% YoY.   The industrial index (Indi-25) did well at +15.1%.   Overall, the FTST JSE All Share rose 1.9% YoY although for December it was down 1.8% month on month (MoM).

Source:  Anchor Capital