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Sanlam Investments issues 2021 August market review

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Sanlam Investments has issued its August 2021 market review, highlighting the financial events that took place in the month of August in relation to the economy of SA.

On Thursday, 9 September 2021, Sanlam Investments issued its August 2021 market review, noting that the month was an eventful one for South Africans. Sanlam highlighted the events of August 2021, including the reshuffling of cabinet which introduced a new finance minister, Enoch Godongwana.

Sanlam noted that in the month of August, the country confirmed a record surge in the unemployment rate, which increased by 34.4 percent. However, the South African economy was also reported to be 11 percent bigger following the release of the Statistics South Africa (StatsSA) gross domestic product (GDP) results.

Sanlam reported only one implied interest rate hike for South Africa, stating that during August, the South African Reserve Bank removed one interest rate hike from its implied benchmark policy rate path for 2021, however, still seeing a 25-basis-point increase during 2021. Sanlam also noted a property growth spurt of a 7.46 percent strong return.

What contributed to the property growth according to Sanlam?

Sanlam reported that South African bonds (ALBI) gained 1.70 percent during the month, with cash returning at 0.32 percent. The MSCI World Index (developed market global equity) is also said to have returned 1.34 percent in Rand terms for August, with the Rand strengthening at 1.2 percent.

Why does Sanlam believe the SA economy was bigger than thought?

Sanlam Investments reported that the new GDP figures lowered the gross debt to GDP ratio to 71.1 percent for the 2020/21 year, from the previous 80.3 percent figure. This is said to have had a positive impact on South Africa’s creditworthiness.

What other events took place in the financial month of August?

The Department of Social Development released a Green Paper on Comprehensive Social Security and Retirement Reform, including a proposal that South African employees should contribute 12 percent of their earnings to the pension fund. The paper has since been withdrawn.

Mahlohonolo Lakaje
[email protected]

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