The local bourse staged a come-back in March, following two months of losses and underperformance against global and emerging markets. The JSE FTSE All Share Index advanced 2.5% MoM but remains down 3.1% YTD. Resource sector counters, particularly those involved in gold and platinum group metals (PGM) mining, emerged as the standout performers on the local exchange, with the Resi-10 index surging 13.9%MoM (-0.5% YTD).
The South African Reserve Bank (SARB) announced that it would keep its primary interest rate unchanged (as widely expected), emphasising the need for a tight monetary policy to mitigate persistently high inflation expectations. In his statement, Governor Lesetja Kganyago noted that the SARB now anticipates headline inflation to reach the target midpoint of 4.5% only by the end of 2025. February saw an uptick in consumer inflation to 5.6% YoY from January's 5.3%, approaching the upper limit of the bank's target. The recent surge was significantly influenced by medical insurance premiums, with wages, education, and housing rents posing upside risk to inflation in the future.

Economic growth forecasts remain mostly stable at 1.2% for this year and 1.4% for 2025, and with ongoing power outages expected to hin-der growth by 0.6 percentage points this year and 0.2 points next year. Market expectations indicate that rate cuts may be delayed until the third quarter, with expectations for the repo rate to end the year at 7.50%. In the final quarter of 2023, South Africa's economy saw margin-al growth of 0.1% QoQ, a minor recovery from the 0.2% contraction in Q3 but still falling short of the expected 0.3% growth. Year-on-year, Q4 GDP growth was 1.2%, marking an improvement from a previous contraction and exceeding forecasts. The overall annual growth for 2023 stood at just 0.6%, a decrease from 1.9% in 2022, highlighting the economic challenges facing South Africa, including structural con-straints and a high-cost environment.

In the USA, inflation experienced another uptick in February, signalling the Federal Reserve will likely postpone interest rate cuts until at least the summer. The consumer price index rose by 0.4% MoM and 3.2% compared to the previous year, still notably higher than the Fed's target of 2%. The US Bureau of Economic Analysis announced that GDP increased at a rate of 3.4% YoY in the fourth quarter, according to its latest and final estimate. This marks an upward revision from the previously estimated growth rate of 3.2%.

In the local fixed-income market, demand for treasury bills remained high with higher spreads being earned on average compared to bank negotiable certificates of deposits (NCDs) across the one- to six-month curve.

The fund returned an above-inflation annualised yield of 9.39% for the month compared to the current inflation rate of 5.6%.