March 2016 market overview

March delivered a mixed bag of economic data but global markets ended the month meaningfully higher.

In SA, positive GDP data of 0.6% for Q4 2015 was released, but the current account deficit widened despite a weaker rand. Consumer price inflation printed at 7% for the year to February 2016, much higher than expected. On a company-specific note, statements by Old Mutual on the potential unbundling of its business significantly boosted the JSE.

In the US, resilient manufacturing and employment data lifted markets. The Federal Reserve announced that it would keep interest rates unchanged and it is currently forecasting 2.2% growth for the US in 2016. In Europe, the ECB indicated that it would put more measures in place to stimulate the weak Euro economy. Meanwhile, in the East, China experienced its largest decline in exports since May 2009.

Despite some worrying data releases and bombings in Belgium and several other countries disrupting the lives of citizens and businesses, the MSCI World Index returned a strong 6.8% for the month on a total return basis in dollar terms. The MSCI Emerging Markets Index returned a stellar 13.2% (also in dollar terms).

The FTSE/JSE All Share Index gained 6.4% on a total return basis in rand during March 2016. With the mild strengthening of the rand, dollar investors in our local stock market gained 14.2%. The top performing sectors of the month were Industrial Engineering and Non-life Insurance. The All Bond Index (ALBI) returned 2.63% this month. Inflation-linked bonds gained 1.05%, while cash returned 0.58%.

Source: I-Net, Bloomberg, Deutsche Bank and Sanlam Investments | One-month total returns up to 31 March 2016