The Good, the Bad and the In-between: Highlights from 2014

While looking too far ahead can be a fool’s game, we believe that taking a quick look back at the markets – and the forces shaping them – is a valuable exercise. Here is a short and sharp summary of how the local and international markets fared last year…

On the home front:

• The JSE All Share Index was sitting at 49 770 at the end of December. The return for 2014 was 10.88%.
• After hovering above the upper level of the target band during Q2 and Q3, inflation likely averaged less than 6% in Q4 due to lower fuel and food inflation. The easing off of fuel inflation was due to a marked decline in the oil price.
• At the end of Q4 the rand was 11.45 against the USD, 2.5% weaker than it was at the end of Q3.  In 2014, the rand weakened 10.3% against the USD.
• Interest rates were left unchanged at the last Monetary Policy Committee (MPC) meeting for 2014 in November.  During 2014, the interest rates were raised twice (by 50bps in January and 50bps in July).

Looking abroad…

• Global equities grew by 1.1% over the last quarter, but there was a wide divergence in performance between countries and sectors.
• Election concerns in Greece affected share markets in Spain, Italy and Portugal and caused the Euro to decline.
• There were deflationary concerns for Europe and the decline in commodity prices (especially oil, which declined by a whopping 45% in USD terms) was problematic for some countries, particularly Russia.
• The Russian rouble had its worst year since 1998 (when the country defaulted).
• The US was the best performing region, rising 4.5% in USD terms, whilst Europe performed the worst and declined 4.3% in USD terms.

Source:  Coronation Fund Managers, Fund Analytics