The JSE ALSI had another bumper month returning 5.71% with all sectors showing strong positive returns; none so much as financials buoyed by confirmation that Barclays will take a stake in ABSA. Most financial stocks have also shown strong earnings reports. Industrials raced ahead on the back of General Retailers and small cap industrials. Resources benefited from an extension in dollar commodity price gains and a firm Rand.

The South African economic environment has been dominated by low inflation and strong consumer demand. The SA trade deficit (exports - imports) has steadily increased. The strong Rand has contained export growth whilst imports have risen fuelled by rising domestic spending and low interest rates. Inflation should remain benign in the short term, but in the longer term is threatened by steadily rising oil prices; rising consumer spending, strong credit demand and a potential Rand depreciation. The Portfolio invests in collective investment schemes investing in equities, bonds, money market instruments and property.

The JSE ALSI had another bumper month returning 5.71% with all sectors showing strong positive returns; none so much as financials buoyed by confirmation that Barclays will take a stake in ABSA. Most financial stocks have also shown strong earnings reports. Industrials raced ahead on the back of General Retailers and small cap industrials. Resources benefited from an extension in dollar commodity price gains and a firm Rand.

The South African economic environment has been dominated by low inflation and strong consumer demand. The SA trade deficit (exports - imports) has steadily increased. The strong Rand has contained export growth whilst imports have risen fuelled by rising domestic spending and low interest rates. Inflation should remain benign in the short term, but in the longer term is threatened by steadily rising oil prices; rising consumer spending, strong credit demand and a potential Rand depreciation.

August market overview: An unexpected 50bp cut in the Repo rate dominated equity and fixed interest markets in August. The All Share index gained 8.7%, largely on the back of the rate cut, which saw rand-hedge resource stocks climb strongly as the rand weakened. The interest rate cut also fed through to strong performance amongst real estate stocks, and the expectation that a lower interest rate would lead to robust credit demand and consumer spending fuelled rises in the broader financial and industrial indices. Long dated bonds achieved strong capital gains as yields adjusted to the rate cut. Yet the rate cut has prompted uncertainty around the Reserve Bank's aims for monetary policy, with a potentially weaker rand and rising oil prices posing a threat to local inflation targets. It is however encouraging to see that growth in the SA economy remains broad based, with all key sectors expanding.