And so another decade ends with a year that proved that we continue to live in interesting times. 2019 will be remembered for deals and doves, protests and populism, bailouts and Brexit, Miss Universe beauties and rugby beasts. Here is our top 20 list to remember the year that was as we enter the next decade with the hopes that the 20’s will be roaring for financial markets.
- Deals: Trump continued to wage war, mostly via Twitter, by making, breaking, and re-making trade deals with China.
- Doves: Tariff uncertainty dented confidence, investment, and trade, but the Fed’s dovish pivot boosted global equity markets and prevented the much-feared recession of 2019.
- Debt: QE and NIRP delivered near US$17 trillion worth of negative yielding debt, which reignited the search-for-yield.
- Downgrades: But free global money was not enough to bail out SA with all three major credit rating agencies – Moody’s, S&P, and Fitch – putting SA on negative outlook.
- Bailouts: Rather, the government opted to bail out persistently mismanaged SOC’s to the tune of R62bn, while putting Prasa under administration, SAA into business rescue, and giving Eskom a special paper, a CRO and a new CEO.
- Load shedding: Unfortunately, R49bn was not enough for Eskom to keep the lights on. Inclement weather, wet coal, broken conveyer belts, diesel shortages, and sabotage triggered stage 6 load shedding in December – carols and everything else had to be by candlelight.
- SARB: On a lighter note, the hawks on the MPC swung round to the idea of giving the squeezed consumer a little help with a unanimous 25bp cut in July. However, there will be no “quantity easing” on Governor Kganyago’s watch.
- Policy: There were pitfalls and promises: the draft NHI bill caused much alarm among private healthcare providers and insurers; the long-overdue IRP made a little more space for renewables, but did not rule out nuclear; and the Competition Commission recommended #datamustfall.
- Protests: The “Latin American Spring” spread across Central and South America with civil disobedience in Venezuela, Chile, Colombia, Brazil, and Peru. The Hong Kong protests continue amid escalating fears of anti-democratic interference from mainland China.
- Populism: A busy election calendar in 2019 delivered a populist bent with victories for BoJo in Britain, Bolsonaro in Brazil, and Modi in India.
- Politics: Even SA shifted away from the centre with the EFF almost doubling its support in the 2019 elections, while the DA lost ground amid policy implosion and leadership vacuum. Factionalism in the ANC continues to prevent reform.
- Stagnation: At the start of the year, the consensus forecast was 1.5% GDP growth for 2019 – year-to-date we are tracking only 0.4% with negative GDP prints in Q1 and Q3.
- Brexit: After almost three and half years of Brexiting, BoJo will hopefully make the latest deadline of 31 January 2020. However, hope is not a strategy and Brexit is not an event, it is a process, so Brexiting will continue.
- Impeachment: Other political entertainment comes in the form of the impeachment hearings in the US – again a process, not an event. Many people said Trump would never be impeached – the same people probably said Trump would never become president.
- S&P500: Thanks to Trump, or maybe despite Trump, the S&P500 is up 27% year-to-date as growth trumped value amid easier monetary policy and relatively robust US growth.
- ALSI: On the home front, equities delivered a more pedestrian 9.7%, but the underlying performance shows that 2019 was quite an exciting year for stock pickers. Deep in the red: Tongaat Hullet (-76% up to its suspension in June following R12bn accounting restatement), Intu Properties (-69% on serial losses, excessive gearing, Brexit and online competition), EOH (-58% on corruption), ArcelorMittal (-58% on weak local demand), and Brait (-54% on debt, investment losses and recapitalisation). More than doubling in value: Impala Platinum (+294%), Sibanye Gold (+247%), Northam Platinum (+194%); Anglo American Platinum (+156%), and DRDGold (+119%) as the ALSI goes back to its mining roots and palladium surges 53%.
- Reinvigoration: After a lost decade, President Ramaphosa has started the arduous process of rebuilding the country’s institutional strength with the appointment of Shamila Batohi as head of the National Prosecuting Authority and Edward Kieswetter as Commissioner of the South African Revenue Service. The ongoing Zondo Commission is yielding proof of the systemic state capture, while the Hawks have already made various arrests giving the first taste of justice and hopes for orange overalls.
- RWC: South Africa won the 2019 Rugby World Cup #siyakolisi #fafspeedo #themagictwelve
- Beauty: South Africa’s Zozibini Tunzi was crowned Miss Universe 2019, while Toni-Ann Singh from Jamaica was crowned Miss World 2019.
- ZAR: At the time of writing USD/ZAR was trading at 14.36, a smidgen away from its 2018 close of 14.38, masking the excitement of 2019.
- Improved to a Level 2 B-BBEE contributor with latest rating
- Matrix NCIS Equity Fund ranks number 6 out of 123 funds in the General Equity space since inception.
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