Tag: bond market
Regulation 28 and the paradox of choice
In February 2022, Finance Minister Enoch Godongwana amended the maximum offshore investment limit for Regulation 28 retirement funds from 30% of assets to 45%. But data shows that most funds haven’t maximised their exposure to the new limit, begging the question: why?
SA’s bond market may hold more (upside) surprises than you think
2022 was an extremely tough year for global fixed income assets, with long bond yields rising sharply in developed markets resulting in one of the worst years for bond markets in almost a century. Emerging market bonds suffered both from a correlated move higher in yields in line with developed market bonds, but also from heightened volatility.
2022 is shaping up to be a year to forget
As capital markets grapple with profound shifts in the macro-economic and geo-political landscapes, for investors, 2022 is turning into a year we’d rather forget. Following relative calm over the South African winter, volatility in bond, equity and currency markets recently returned with a vengeance.
Attractive investment opportunities for those who can navigate the current fear...
Significant uncertainty, marked by rampant inflation, fears of a looming recession and growing geopolitical risk, clouds the near-term global outlook. The knee-jerk reaction is to retreat to safe assets and preserve capital until the storm has blown over.
Bonds are back – here’s why
A record sell-off coupled with a shifting economic backdrop mean opportunities in global fixed income markets have appeared. It has been an extraordinary time for bond markets. As an asset class, fixed income is often seen as equities’ boring cousin, particularly over the past decade of low yields. Recent months, however, have been anything but boring, albeit for the wrong reasons.
Dollars and sense
It’s been a busy time for the US dollar. On the one hand, it has featured heavily in commentary on the future of the global monetary system. On the other hand, it has surged in foreign exchange markets. In other words, even as many commentators question the future of the dollar as global reserve currency, participants in foreign exchange markets have scrambled to buy more dollars.
Bombs, blood and bonds
The bigger the military operation, the more sophisticated the financial machinery required to fund it. The Bank of England, today still the UK’s central bank, was created in 1694 as the government’s bank, largely to finance its ongoing wars with France.
2022 budget – reading between the lines
Budget 2022 was a ‘read between the lines’ event and should be interpreted with cautious optimism, we argue. Much weaker GDP inflation assumptions allowed the National Treasury to downplay future revenue collections, yet still bring the primary budget back into surplus a year earlier than originally planned, in line with our view.
2022 – Making sense of currencies
Foreign exchange fluctuations can have a material impact on investment portfolio returns measured in terms of a base currency. We dedicate significant resources into understanding currencies through a range of models, backed by observations from our local teams.
Markets confirm a positive reaction to Godongwana’s first major speech
Finance Minister Enoch Godongwana’s first significant speech since his appointment in August 2021 saw a minimal reaction from the equity market. Good news had been expected from the Medium-Term Budget Policy Statement (MTBPS) and the market signalled its satisfaction that there were no negative surprises, such as alluding to tax rate increases.
