SA Investment Strategy | Monthly wrap – May 2019: Sell in May
Global risk-off sentiment weighed on the rand (-1.9% in May'19), among the worst-performing EM currencies, while most political commentators considered Ramaphosa's post-election cabinet a compromise. From a SA asset-allocation perspective, SA equities (Capped SWIX TR -4.8%) underformed bonds (+0.6%) and cash (+0.6%) in May'19. We downgraded SA equities from Overweight to Neutral in early April'19. The capped SWIX index fell by 4.8% led by Technology (Naspers -10.4%), and Basic Materials (-5.1%) with Chemicals -21%, as trade concerns amplified global growth fears. Unsurprisingly, safe-haven stocks including Gold (+12.7%) stocks outperformed. Telkom (+8.2%) rallied as it looked to divest properties and seek an equity partner for its property division. Meanwhile, Emerging Markets (-7.5%) underperformed the developed world (6.1%) in May 2019.
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Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.
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