Looking Back on 2020: An Extraordinary Year for the Markets

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%.

Source:  MitonOptimal