JSE shines in Q3 2024

The Johannesburg Stock Exchange (JSE) experienced a remarkable third quarter in 2024, marking its strongest Q3 performance in over a decade.

This period brought exceptional returns for South African investors, driven by a combination of local and global factors.

Local Bonds and Equities Surge

Local bonds performed strongly, while global equities and bonds had muted returns. The FTSE/JSE All Share Index (Alsi) rose by an impressive 9.6%, with listed property and financials being key contributors. Over the 12-month period to the end of September, the Alsi was up 23.9%, local bonds up 26.1%, and global equities up 21.7%.

Rand Strengthens and Inflation Declines

The rand strengthened against the US dollar, appreciating by 5.6% during the third quarter. This was accompanied by a continued decline in inflation and a reversal in the interest-rate cycle, with a 0.25% drop in the repo rate. These factors contributed to a surge of optimism in South Africa’s economic future.

Listed Property and Gold Shine

Listed property made a remarkable comeback, with a 51.3% increase over the past 12 months. Gold also enjoyed a boom, with prices surging by 13% in US dollars for the quarter and 44% over the past year. These sectors were among the top performers, contributing to the overall strength of the JSE.

Global Investment Environment

Globally, the investment environment was more tenuous, with central banks beginning to cut interest rates and geopolitical tensions rising. Despite these challenges, the JSE’s strong performance in Q3 2024 highlighted the resilience and potential of South Africa’s financial markets.

The Q3 2024 performance of the JSE offers several valuable lessons:

Economic Stability and Confidence: The formation of the Government of National Unity (GNU) and subsequent political stability played a crucial role in boosting investor confidence. This highlights the importance of a stable political environment for economic growth.
Diversification: The strong performance of listed property and financials, alongside the surge in gold prices, underscores the benefits of a diversified investment portfolio. Different sectors can perform well under varying economic conditions, spreading risk and enhancing returns.
Global and Local Factors: The JSE’s performance was influenced by both local factors, such as the strengthening rand and declining inflation, and global factors, like central banks cutting interest rates. Investors should consider both local and global economic indicators when making investment decisions.
Interest Rate Sensitivity: The reversal in the interest-rate cycle, with a 0.25% drop in the repo rate, positively impacted the market. This demonstrates how sensitive financial markets can be to changes in interest rates, and the importance of monitoring central bank policies.
Resilience in Uncertain Times: Despite global geopolitical tensions and a tenuous investment environment, the JSE showed resilience. This resilience can be attributed to strong local economic fundamentals and investor optimism.

Role of a Financial Adviser in Investment Planning

During periods of market volatility, a financial adviser can provide an objective perspective, helping you stay disciplined and avoid making impulsive decisions that could negatively impact your portfolio. Advisers can also help you create a comprehensive financial plan that aligns with your long-term goals.

The information contained in this article is of a general nature and intended for information purposes only. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial, legal or other issue. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner/adviser to take into account your particular investment objectives, financial situation and individual needs.