Quarterly Report | Q2 ’24

Introduction

The South African Reserve Bank (SARB) is expected to follow suit with rate cuts as local inflation risks remain manageable. Although the SARB’s push for a lower inflation target implies higher policy rates initially, they may decrease as inflation expectations align with the new target. Asset volatility continued in South Africa due to election-related news during the second quarter of 2024. The ruling ANC party faced a significant setback, securing only 40% of the vote, necessitating efforts to form a functional government. The trajectory of stability, policy certainty, and the reform agenda over the next few years will largely depend on these developments.

GEO – POLITICAL TEMPERATURE MILD MODERATE GETTING HEATED 6 Local assets performed well, with bonds rallying more than 5% and the rand appreciating by more than 3% towards the end of the quarter. General retailers and banks also rallied by 15-20%. Local asset prices may continue to benefit from better electricity supply, improved political certainty and expected rate cuts.

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