
Local and Global Macro Economic Perspectives
South Africa’s financial landscape exhibited positive momentum in recent months, highlighted by gains in the JSE All-Share Index and a significant rise in property and industrial stocks. As the SA Listed Property Index led with an 8.3% monthly surge, investor optimism was further buoyed by declining consumer inflation, which reached a three-year low of 4.6% year-on-year in July. This easing inflation, coupled with the likelihood of an interest rate cut at the upcoming South African Reserve Bank meeting, points to a favorable economic outlook.

South Africa
26.1029°S, 28.0576°E
South Africa’s JSE All-Share index extended its gains after breaching the 84,000 level and reaching a record high before retreating slightly to close the month 1.19% in the green. Domestically focused stocks, particularly property shares, banks, insurers, and retailers, performed well on the JSE. The standout performer was the SA Listed Property Index, which surged 8.3% MoM as property stocks rebounded amid improving investor sentiment and a wave of deal-making. Industrial stocks, as reflected by the Indi-25, increased by 4.0% MoM, while the Fini-15 index gained 5.5% MoM.
In July, consumer inflation dropping to a three-year low of 4.6% year-on-year, down from 5.1% in June, and surpassing analyst expectations of 4.9%. This brings inflation closer to the South African Reserve Bank’s target midpoint of 4.5% and strengthens the likelihood of an interest rate cut at the upcoming policy meeting on September 19th. Key drivers of this decline include a reduction in food and non-alcoholic beverage inflation to 4.5% from 4.6%, and a notable decrease in fuel prices. With the diminishing impact of the El Niño phenomenon, further moderation in food prices is expected, which could drive inflation below 4% by year-end. Transport inflation also slowed to 4.2% in July, further contributing to the overall downward trend in inflation.
South Africa’s official unemployment rate increased for the third consecutive quarter, reaching 33.5% in Q2 2024, up from 32.9% in Q1. This marks the highest unemployment rate since COVID-19 restrictions were lifted in 2022, though still below the record high of 35.3% in late 2021. The number of unemployed individuals rose to 8.4 million, driven by job losses in key sectors like trade, agriculture, and construction. The youth unemployment rate also climbed to 60.8%. Economists highlight that significant job creation remains unlikely in the short term due to weak economic growth, structural constraints, and cautious consumer spending. Looking ahead, meaningful employment recovery is expected only as inflation moderates and interest rates are reduced, potentially boosting domestic demand.
South African businesses reported a continued decline in activity at the beginning of the second half of the year, with the downturn worsening since June due to weakening sales and increased supply-side pressures. The S&P Global South Africa Purchasing Managers’ Index (PMI) for July registered 49.3, slightly below the neutral 50.0 mark, indicating a modest decline in private sector health for the second consecutive month. Output and new business dropped at the sharpest rate in four months, exacerbated by port congestion both domestically and internationally, which negatively impacted vendor performance. Despite these challenges, firms remain optimistic about the next 12 months, citing expectations of increased political stability, reduced load shedding, and easing price pressures as potential drivers of growth. Input price inflation slowed, and output charges rose at their slowest rate in nearly four years, which could be a positive sign for the Reserve Bank as it considers future monetary policy easing.
United States
40° 42′ 24.7572” N, 74° 0′ 40.554” W
August brought heightened volatility to the S&P 500. The index experienced a 6.1% drop during the first three trading days of the month but managed to recover, finishing August with a 2.3% gain. Year-to-date, the S&P 500 (SPX) has risen 18.4%, building on a 24.2% increase in 2023.
The month began with significant volatility as nonfarm payroll data fell short of expectations, with only 114,000 jobs added compared to the anticipated 176,000. The unemployment rate increased to 4.3% from 4.1% in June, triggering the Sahm rule, which has accurately predicted the last nine recessions since 1960. The following Monday, the S&P 500 index plunged by 3.00%, and the CBOE Volatility Index soared to 38.57, its highest level in three years.
July’s headline Consumer Price Index (CPI) registered at 2.9% year-over-year, slightly below the expected 3.0% and its lowest level since March 2021. Shelter inflation remained stubborn, contributing to over 90% of the headline figure. The market found some reassurance in the 2.9% headline CPI print, which suggested that inflation might be moving toward the Federal Reserve’s 2% target without causing further growth concerns. Consequently, the S&P 500 experienced eight consecutive positive trading days from August 8 to 19. The Fed’s preferred inflation measure, Core PCE, came in at 3.2% year-over-year, matching expectations and slightly down from 3.3% previously.
At the Federal Reserve’s meeting on 30-31 July, most participants indicated that if economic data continued to align with expectations, a rate cut would likely be appropriate at the September meeting. Although the Fed opted to hold rates steady in July, there was substantial debate about the possibility of a rate reduction given recent progress on inflation and rising unemployment. Some officials felt a 25-basis point cut could have been justified at that time. The meeting minutes revealed confidence in the direction of inflation toward the 2% target but expressed ongoing concerns about the labour market, particularly with revised data suggesting job gains might have been overstated by over 800,000.
During the Federal Reserve’s annual gathering in Jackson Hole, Fed Chair Jerome Powell signalled that interest rate cuts are likely on the horizon. He emphasized the Fed’s intention to avoid further weakening of the labour market and indicated that policy adjustments are imminent. The Fed’s next meeting is scheduled for 17-18 September, where a rate cut is expected. Powell’s remarks marked a shift from his previous focus on aggressive inflation control to supporting the labour market.
In July, the US Manufacturing Purchasing Managers’ Index (PMI) fell to 49.5, its lowest level in seven months, down from 51.6 in June and below the expected 51.7. This decline was primarily due to a significant drop in new orders. However, retail sales increased by 1% month-over-month in July, surpassing the anticipated 0.4% rise.
United Kingdom
51°30’32.39″ N, 0°05’33.90″ E
The UK FTSE 100 closed out August with a slight gain of 0.10%.
The Bank of England (BoE) lowered its key interest rate from a 16-year high of 5.25% to 5%, marking the first rate cut in over four years. This decision, made with a narrow 5-4 vote, comes after consumer price inflation met the BoE’s 2% target in May and June, down from a peak of 11.1% in October 2022. BoE Governor Andrew Bailey stressed the need for caution, warning against rapid or excessive rate cuts to maintain low inflation. The decision to reduce rates was described as “finely balanced,” reflecting internal disagreements among policymakers.
The UK economy grew by 0.6% in the second quarter of 2024, slightly down from 0.7% in the first quarter but in line with forecasts. Growth was flat in June, following a 0.4% increase in May. This performance indicates ongoing recovery from a technical recession at the end of the previous year, though challenges like low productivity and strained public finances persist. Chancellor Rachel Reeves welcomed the rate cut but emphasized the necessity for continued fiscal discipline, highlighting the government’s commitment to addressing a £22 billion public finance gap and making “tough choices” in her October Budget.
In the three months to June, the UK’s unemployment rate unexpectedly fell to 4.2%, down from 4.4% and better than the forecasted 4.5%. Meanwhile, the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose to 52.1 in July from 50.9 in June, signalling an improved manufacturing sector. This increase was driven by stronger production growth, new orders, and employment. However, the sector faced inflationary pressures, with input prices reaching an 18-month high due to the Red Sea crisis and freight issues. Despite these challenges, business sentiment improved, with 60% of surveyed companies anticipating higher output over the next year.
British retail sales rose by 0.5% in July, recovering from a revised 0.9% decline in June. This increase was led by higher spending in department stores and on sports equipment, following a period of wet weather that had dampened shopping. Department store sales grew by 4%, and sports equipment sales rose by 3.5%, while clothing and household goods sales fell by 0.6%, and fuel sales dropped by 1.9%. This rebound reflects a recovery in consumer spending, suggesting a positive outlook for the retail sector as economic conditions stabilise.
Eurozone
51°30’32.39″ N 0°05’33.90″ E
Tracking most major indices higher, European equity markets ended August in the green with the German DAX and French CAC40 advancing 2.15% MoM and 1.32% MoM respectively.
Eurozone inflation edged up slightly in July to 2.6% YoY, from 2.5% in June. Core inflation, excluding volatile items like food and energy, remained steady at 2.9%, indicating persistent underlying price pressures above the European Central Bank’s (ECB) 2% target. Services inflation, which accounts for nearly 45% of the Harmonised Index of Consumer Prices (HICP), stood at 4%, slightly down from 4.1% in June but still the largest contributor to the overall inflation rate. In contrast, non-energy industrial goods saw the lowest inflation rate at 0.7% in July. The slight uptick in inflation complicates expectations for quick rate cuts by the ECB, particularly as wage growth in Germany, the bloc’s largest economy, remains strong. The ECB remains data-driven, with President Christine Lagarde stating that future decisions, including potential rate cuts, will depend on upcoming economic data. The market anticipates at least two more rate reductions this year, but the ECB is committed to bringing inflation back to its 2% medium-term target before resuming a rate-cutting cycle.
HCOB Eurozone Composite PMI for July posted a decline to 50.2 from June’s 50.9. This indicates only marginal growth in the Eurozone’s private sector, the weakest since March. Demand for goods and services in the Eurozone, particularly from international sources, continued to weaken, leading to stagnant employment levels and a six- month low in business confidence. The HCOB Eurozone Manufacturing PMI remained at 45.8 in July, unchanged from the previous month. The manufacturing sector continued to struggle, with new orders contracting for the 14th consecutive month, forcing factories to rely on backlogs to maintain output levels. Lower demand led to the sharpest decline in employment so far this year, and firms reduced their purchasing levels accordingly. In contrast, the HCOB Eurozone Services PMI fell to 51.9 in July from 52.8 in June, marking the slowest expansion in services activity since March. Slower growth in new business, particularly in domestic markets, coupled with moderating demand for capacity, led to a slowdown in job creation. Input costs rose due to higher staffing and material expenses, but softer demand limited the impact on output prices. Business confidence in the sector dipped to a six- month low, continuing the downward trend from May’s peak.
China
31° 14′ 12.3″ N, 121° 30′ 31.5″ E
Chinese stocks extended their downward trend in August as ongoing turmoil in the real estate sector and lower than expected second quarter GDP growth continued to weigh on investor sentiment. The Shanghai Composite index ended August 3.29% in the red.
The People’s Bank of China (PBOC) has maintained the one-year and five-year Loan Prime Rates (LPR) at 3.35% and 3.85%, respectively. These rates serve as the benchmark for business loans and mortgages. In July, the PBOC reduced both the one-year and five-year LPR by 10 basis points and lowered the seven-day repo rate from 1.8% to 1.7%, following significant policy meetings that outlined economic priorities for the next five years. These measures aim to support China’s target of achieving 5% growth in 2024.
China experienced a higher-than-expected rise in consumer prices in July, with the consumer price index (CPI) increasing by 0.5% YoY, primarily driven by a spike in pork prices. The increase surpassed consensus expectations of a 0.3% rise and marked the highest rise since February’s 0.7% increase during the Lunar New Year festivities. Pork prices, a widely consumed staple in the Chinese diet, surged 20.4% YoY, the most substantial rise since December 2022. These prices are known to fluctuate widely, often influenced by factors such as disease outbreaks affecting supply. Core CPI rose by 0.4% YoY, a slight decrease from June’s 0.6% increase. The report also highlighted ongoing challenges in the real estate sector, with rental prices dropping by 0.3% YoY. The producer price index (PPI) decreased by 0.8% YoY, slightly more than the anticipated 0.9% decline, and maintaining the same rate of decline as in the prior month.
The Caixin Manufacturing PMI indicated a contraction in manufacturing activity for the first time in nine months, moving from 51.8 in June to 49.8 in July. This contraction is attributed to reduced input costs and competitive pressures leading manufacturers to lower their selling prices. The Caixin Service PMI increased from 51.2 to 52.1, reflecting an upturn in new orders within the services industry, which has subsequently led to increased employment and a renewed sense of optimism among businesses.
Japan
35° 40′ 34.55″ N, 139° 46′ 26.21″ E
The Japanese Nikkei225 extended its losing streak, slipping 1.16% MoM, after the Bank of Japan hiked its policy rate by 25bps in late July.
Japan’s second-quarter GDP increased by 0.8% QoQ, surpassing the consensus expectation of a 0.5% rise. This growth marked a turnaround from the revised 0.6% contraction observed in the first quarter. Private consumption, contributing to more than half of the GDP, saw its first increase in five quarters, growing by 1% during the April-June period. Despite persistent inflation, with the headline consumer price index averaging a 2.7% rise over the same timeframe, household spending likely benefited from stronger wage growth. Over the quarter, nominal wages accelerated and, in June, surpassed consumer price inflation for the first time in two years.
Japan’s headline National Consumer Price Index (CPI) rose by 2.8% YoY in July, maintaining the same rate of increase as the previous month. Core inflation, which excludes fresh food prices, rose for the third consecutive month in July, reaching a 2.7% increase YoY. This increase was slightly above June’s 2.6% and aligned with consensus expectations, maintaining the inflation rate above the Bank of Japan’s (BOJ) 2% target for the 28th consecutive month. The more narrowly focused “core-core” inflation index, which also excludes energy, increased by 1.9%, down from 2.2% in June. This marked the first drop below 2% since September 2022. This inflation data is crucial for the BOJ’s upcoming interest rate decisions. The BoJ raised rates to a 15-year high in July, a move that shocked the markets and led to a drop in Tokyo stocks reminiscent of 1987’s Black Monday sell-off.
Japan’s Producer Price Index (PPI) in July saw an increase of 3.0% YoY, meeting market expectations and marking a slight rise from June’s 2.9% increase. This increase represents the sixth straight month of acceleration, and the fastest growth rate observed in 11 months. A significant factor behind this increase was the 10.8% YoY rise in yen- denominated costs for imported materials.
The au Jibun Bank Service Purchasing Managers’ Index (PMI) climbed to 53.7 in July, up from 49.4 in June, which was the first contractionary reading in 21 months. The improvement in the Services PMI was largely fuelled by increases in total activity and new business, driven by increased customer numbers and improved demand conditions. The au Jibun Bank Japan Manufacturing PMI dropped to 49.1 in July from the neutral mark of 50.0 in June, indicating a worsening in the manufacturing sector’s operating conditions compared to the previous month. The downturn in the Manufacturing PMI was mainly due to a decline in production levels and a significant reduction in new order volumes, linked to weak demand from both domestic and international markets.
Equities
Top 10 Best Performing Shares (August 2024):

Telkom saw its share price gain 19.7% in August after the group released a trading update for the first quarter, which showed that revenue and EBITDA rose by 3.9% and 24.1% respectively. This growth was driven by strong demand for its next-generation offerings, which now make up 80.7% of group revenue.
August saw property stocks among the top performers. The boost in sentiment within the property segment was largely driven by lower bond yields and unexpected inflation figures, indicating that interest rates might decrease sooner and more significantly than previously anticipated. Given that property companies are particularly sensitive to interest rate expectations and bond yields, this development has had a positive impact on the market. Additionally, recent deal-making activity in the property sector has further strengthened investor confidence, pushing the SA Property Index to a year-to-date rally of 20.0%. Hyprop, a leading South African property group, recorded an 18.40% month-on-month increase in its share price, placing it in second place. Both Hyprop and Attacq, two of South Africa’s largest shopping mall owners, are divesting their stakes—amounting to approximately R1 billion—in malls across Nigeria and Ghana to concentrate on their South African investments. Hyprop also maintainsa portfolio in Eastern Europe. The transactions, which involve the sale of their holdings in Ikeja City Mall in Nigeria and several prominent malls in Ghana, are part of their strategic plan to exit sub-Saharan Africa. Both companies announced that these disposals align with their focus on the South African market. Collectively, Hyprop and Attacq own some of the country’s largest and most frequented malls, including the Mall of Africa, Canal Walk, and Rosebank Mall.
Motus shares rallied 17.01% in August. Bloomberg reported that there was a sharp increase in the volume of Motus shares traded in August.
Motus was followed by We Buy Cars (+15.57% MoM) and Growthpoint (+14.26% moM).
Top 10 Worst Performing Shares (August 2024)

The worst performer for the month, Northam Platinum plunged 26.10% MoM after reporting an 81% drop in headline earnings per share, pressured by lower platinum group metal (PGM) prices. The company expects these conditions to persist in the near term. CEO Paul Dunne acknowledged that the coming period would be challenging, with no immediate recovery in sight. Despite achieving strong production and record sales volumes, operating profit also declined by 69%. Dunne emphasised that Northam is now hoping for rate cuts from the US Federal Reserve to boost demand for PGMs, which are primarily used in emission control for internal combustion engines. Dunne noted that the first sign of recovery would likely come from a rate cut by the Federal Reserve, which could signal the end of its rate hiking cycle. Additionally, he predicted that PGM prices might rise due to supply constraints, particularly as South Africa’s platinum mining industry faces an “inevitable decline” due to a lack of investment over the past decade. Northam declared a final dividend of 70 cents per share, bringing the total annual dividend to R1.70 per share, down from the R6 dividend declared last year. The company excluded a headline earnings loss related to its failed takeover bid for Royal Bafokeng Platinum.
Following in second place, Gold Fields slumped 22.32% MoM having revised its annual output forecast downward for the second time this year due to severe winter conditions at its Salares Norte mine in Chile. The harsh weather, which led to frozen pipes and production delays, forced the company to lower its 2024 production forecast to between 2 million and 2.15 million ounces, marking its lowest output since 2013. This setback follows an earlier revision in June, with initial targets proving overly ambitious. The company’s South Deep mine in South Africa also faced significant challenges, with a 25% decline in gold output due to backfill rehandling issues and poor ground conditions. This reduced production contributed to a 30% decline in profit for the first half of 2024. Gold Fields further lowered its South Deep production forecast and reported similar production declines at its Australian and Ghanaian mines, along with a 45% drop at its Peru mine, Cerro Corona. Despite these challenges, CEO Mike Fraser remains optimistic about a recovery in the second half of the year, driven by operational recovery plans and enhanced safety processes. The company expects improved production volumes in the latter half of the year, which could lead to a rebound in earnings.
The third-worst performing counter on the JSE, African Rainbow Minerals (-19.44%) announced in late July that it will acquire the remaining 50% of the Nkomati Mine from Norilsk Nickel Africa, becoming the sole owner. This mine, located in Mpumalanga, is rich in nickel, copper, cobalt, and platinum group metals. Currently on care and maintenance, Nkomati was previously a significant producer of these resources. ARM will assume Norilsk Nickel Africa’s obligations and has committed R836 million for rehabilitation, reflecting its focus on responsible mining. The acquisition, which has been reviewed by the Competition Commission, is pending final approval from the Competition Tribunal. This move is part of ARM’s strategy to consolidate its assets and strengthen its role in the South African and renewables markets.
Montauk Renewables (-19.29%) was the fourth-worst counter on the JSE in August.
DRD Gold was the fifth worst performer for the month. Despite benefiting from a rise in gold prices, DRDGold experienced operational challenges in the financial year to end-June. The company saw a 5% decrease in gold production over the year, attributed to a 3% reduction in throughput and a 2% drop in average yield, while all-in sustaining costs rose by 14%. Most of these operational setbacks occurred at the Ergo subsidiary, where gold production decreased by 7% due to delays in commissioning two mining sites, unexpected design changes mandated by the water and sanitation department, and community-related disruptions.