Market index returns – April 2020

The year 2020 has seen its fair share of major historic events in just over a few months. In April, the COVID-19 pandemic passed a grim milestone infecting more than three million people worldwide. The lockdown on Wuhan, China the city where the first Covid-19 case were reported, was lifted after 76 days. This allowed more movement of traffic in and out of the city, but still with very strict measurements in place. The lifting of the lockdown was a positive sign to the rest of the world, but it was also seen as a test for a potential “second wave” of infected cases. The reopening of the economy showed some slow positive signs in the market with the Shanghai Composite Index gaining 2.86% in 1 month. In the US, the New York state is currently the epicentre of the outbreak and had more coronavirus cases than any country in the world, with over 160 000 people infected. According to New York Governor Andre Cuomo, the hospitalisations are slowing and levelling off. The major stock indices, the S&P 500 Index (up 13.74%) and the NASDAQ Composite Index (up 16.71%) have performed well over the last month. Oil prices have remained weak after US crude plunged into negative territory for the first time in history in April, with traders panicking over a lack of storage for oil. The Western Cape has the most reported Covid-19 cases in South Africa and has the second lowest recovery rate. As at the end of April the total recoveries were 779 patients out of 1952 active cases. The Western Cape has increased its community screening and testing as the province has now screened over 250 000 people in the past month. On the 21st of April President Cyril Ramaphosa announced a stimulus package of R500 billion towards fighting the pandemic in South Africa. The money will come from its adjustment budget, the Unemployment Insurance Fund and multilateral institutions. The stimulus package amounts to around 10% of our GDP and is bigger than most of our emerging market peers. On 23 April President Ramaposa introduced the steps for the phasing out of the lockdown. They will be using five levels of restrictions, with level 5 as “high virus spread” and level 1 as “Low virus spread”. As of 1 May, South Africa has progressed to level 4 with some restrictions lifted (more people may return to work, purchasing of winter clothes are permitted etc.). This will all contribute to the much needed kickstart of South Africa’s economy.

  • The JSE All Share Index (up 14.0%) had a significant turnaround since last month. Financials (up 11.9%), Industrials (up 9.6%) and Resources (up 23.0%) was the best performing sector overall.
  • Mid-cap shares (up 8.5%), Large-cap (up 14.7%) and Small-cap shares (up 8.8%) all had good performances during April.
  • The MSCI World Index ended the month up 11.0% in US Dollar terms while Emerging Market equities underperformed their Developed Market peers and ended the month up 9.2%.
  • The South African Listed Property sector (up 7.0%) and the SA REIT sector (up 4.5%) had a massive turnaround since March.
  • The Rand depreciated 2.8% against the US Dollar, 2.6% against the Euro and 4.6% against the Pound Sterling.
  • In April, the Gold price (up 6.4%) underperformed both the Platinum price (up 11.7%) and the Oil price (up 11.1%) in US Dollars.

The below graph shows the Asset Class Returns for April
(in ZAR):

View April market performance     |     View April asset class returns graph