There can be no doubt that the economic events of 2020 were near impossible to predict, and have taken almost everyone by surprise. Here, we take a closer look at the major trends and impacts on global and local markets and sectors…
- Global equities delivered 21.7%, ending 2020 on a high: this could be attributed to the outcome of the November US elections, the announcement of COVID-19 vaccines, a last-minute Brexit deal and a US stimulus package.
- SA equities delivered 7% (bear in mind that they were down more than 30% at one stage in March 2020).
- The hardest hit sector was property.
- Broadly, resources made good gains.
- The financial sector was hit hard given the uncertainty of individuals and companies being able to repay debt.
- The SARB cut the repo rate by a total of 3%.
- Inflation closed the year at 3.2%.
- The Rand depreciated 5% against the USD and 8.2% against Sterling.
- The SA GDP for 2020 was -8.0%.
- The IMF projects that most countries will achieve less than 0.0% grown in 2020.
Looking ahead, analysts are optimistic about the roll-out of the vaccines and a recovery in the global economy, which should be positive for equities. The running yield on cash is 3.7%.