STANLIB Podcasts

STANLIB Chief Economist Kevin Lings says that although the Minister proposes a smaller-than-expected VAT increase, he has sought additional revenue elsewhere by removing an adjustment for fiscal drag and implementing smaller increases in social grants. Hopefully, opposition to the VAT increase from the DA will be resolved by 2 April. Kevin says the biggest disappointment in the Budget is the weak...

In this podcast, STANLIB Chief Economist Kevin Lings notes that SA’s economy grew by a disappointing 0.6% q/q in Q4 2024, and by merely 0.9% on an annual basis. This continues a long-term trend: over the last 10 years, the country’s GDP growth has averaged 0.8% a year. Turning this weak performance around requires policies that stimulate growth and encourage more private sector involvement. Moving...

In January 2025, SA inflation increased slightly to 3.2%, which is at the lower end of the Reserve Bank target and at levels that have been under control for some time. Inflation is expected to track higher from mid-year, possibly to 4.7% by the end of December. This means the Reserve Bank can easily keep rates on hold with a slight bias to the downside. With US President Donald Trump’s announceme...

South African retail sales reflected a phenomenal last quarter of 2024 as consumer spending was boosted by two pot pension withdrawals. Sales in the last quarter increased by 5.4% year-on-year in real terms, indicating spending as if there was a 5% to 6% increase in the economy. These sales numbers will help to boost the economy in 2024, but this still leaves the 2024 GDP outcome at this stage at...

Last week, South Africa's 2025 Budget Day was postponed, prompting significant discussions across the financial landscape. Our Chief Economist, Kevin Lings, has released a podcast that explores the current situation and outlines various scenarios for how the budget might be adapted as we approach the new budget day on 12 March. You can listen to the podcast here for valuable insights.

In January 2025, US inflation data surprised with a 0.5% m/m increase, pushing up annual inflation to 3%, which is above the 2% target. The details showed some broadening out of price pressures. This makes it likely the US Federal Reserve will hold rates for the next couple of months, which would influence other central banks, including SA. The US has delayed until March its intended tariffs on Ca...

The US added 143 000 jobs in January, fewer than expected, but the unemployment rate fell to 4% from 4.1%, showing the labour market is still extremely strong. However, wage growth accelerated by 4.1% y/y. This is relatively high, and may persuade the US Federal Reserve to keep interest rates on hold for the foreseeable future as it gauges the effect of new import tariffs. US President Donald Trum...

The fourth quarter of 2024 was interesting, Marius Oberholzer, Head of STANLIB’s Multi-Asset team, says. The stand-out event was the sweeping Republican victory in the US presidential election, which is likely to be followed by higher tariffs, corporate tax cuts and deregulation of many industries in the US. Marius believes 2025 offers a fertile environment for investment, due to, among other thin...

Nervousness around the US election made Q4 a tough one for risk assets generally, including global fixed income, says Sylvester Kobo, STANLIB Asset Management’s Deputy Head of Fixed Income and manager of the STANLIB Flexible Income Fund, in this podcast. However, the fund returned 13.4% for the year against 9.3% for its benchmark. Many assets are still attractively valued, he says. Local bonds and...

In this podcast, Rademeyer Vermaak, STANLIB’s Head of Systematic Solutions, identifies several risks facing South African equities in Q1 2025. These include sticky global inflation, high domestic interest rates, which put consumers under pressure, lingering political instability under the Government of National Unity, and SA’s stance on Russia, China and Israel, which could alienate the US. Rademe...

Duties imposed by US President Donald Trump on imports from Canada, Mexico and China have already triggered retaliatory measures which could easily escalate into a global trade war. These tariff hikes will have negative consequences for global inflation, interest rates and growth and it is difficult to see that the US will benefit. Meanwhile, the South African Reserve Bank decided to cut interest...

SA’s December annual inflation rate, at 3% (from 2.9% in November) was surprisingly low, showing few signs of pressure other than in administered services. This should encourage the Reserve Bank to cut interest rates at end-January by 25 bps to 7.5%. We expect the bank will remain cautious but will make a further rate cut to 7.25%, the neutral rate, by mid-year. US President Donald Trump signed 36...

US headline inflation data for December was in line with expectations but core inflation surprised on the downside, as it rose by 3.2% y/y from 3.3%. This pushed up US bond and equity markets. Core inflation benefited from a moderation in the rate of increase in rentals. However, this does not affect the outlook for interest rates, with no cuts expected for the next couple of months. A flurry of e...

Uncertainty about how aggressive incoming US president Donald Trump will be in implementing policy has hung over global markets in recent weeks. Continued US economic strength, as reflected in labour market and other data, is also creating nervousness about underlying inflationary pressures and future interest rate cuts. This is negative for bonds and equity valuations in the short term. The rand...

In Q3 2024, SA’s GDP fell by a surprising 0.3% quarter on quarter, while the market expected a small increase. This mainly reflected a massive decline in agricultural production, which fell 28.8% q/q, largely reflecting a four million tonne drop in the maize crop (which was actually an annual, not quarterly decline). This will make it difficult for SA to achieve a 1% GDP growth rate for 2024. Vari...

The Global Debt Monitor for Q2 2024, which includes data for developed and emerging economies, was released on 25 November 2024, while the Frontier Markets Debt Monitor for Q2 204 was released on 4 November 2024. This provides a good opportunity to examine South Africa’s total level of debt, both foreign and domestic, within an international context.

US core personal consumption inflation for October remained elevated at 2.8% y/y, despite relatively high interest rates, suggesting that the US Federal Reserve (Fed) does not have to be in a hurry to take interest rates significantly lower. We expect that the extent of further US interest rate cuts will be determined by trends in inflation data and the strength of the US economy. SA’s producer pr...

SA’s headline inflation rate for October fell to 2.8% y/y, which was lower than expected, showing a pleasing reduction from above 5% in June. A key reason was a drop in fuel inflation, which is currently -19%. Food inflation has also dropped below 3% from over 14% in 2023. However, there is upward pressure on fuel, food and electricity prices and inflation is likely to revert to about 4.5% in the...

The US inflation rate in October was 2.6% y/y from September’s 2.4%, which was in line with expectations but still above the US Federal Reserve (Fed) target of 2%. Core inflation, however, is at 3.3%, largely due to shelter prices, and there are other inflationary pressures which will require the Fed to be more cautious about making future interest rate cuts. While a 25 bps cut is still expected a...

It's hard enough to manage our own biases but certainly we are nowhere near the point where we let the machines loose on making decisions,’ says Peter van der Ross, deputy head of multi-asset and portfolio management at STANLIB.

The Republican Party is on the verge of securing a sweeping election result, which puts President-Elect Donald Trump in a powerful position to effect policy changes. These policies could stimulate growth, but also have negative consequences. They include extending tax cuts, imposing a wide range of import duties (which could trigger an international trade war and add inflationary pressure) tighten...

A range of US labour market data was released last week but it was distorted by the hurricanes in September and October. Only 12 000 jobs were created in October – way below the 100 000 that the market expected, but the response rate to the survey was low. The unemployment rate remained steady at 4.1%, showing the labour market remains quite robust. Q3 GDP showed the US economy grew 2.8% y/y, bett...

The MTBPS delivered by the Minister of Finance disappointed bond investors, says Victor Mphaphuli, STANLIB Head of Fixed Income. In the current fiscal year, revenue collection is weaker and expenditure greater than expected, with the budget deficit seen at 5% vs 4.5% projected in February. The 10-year government bond peaked at 10.5% after the speech from 10.35% earlier, and the rand weakened by 0....

Projections for medium-term economic growth in the MTBPS are low, at around 1.8% average a year, suggesting that government’s initiatives are not going to lift growth meaningfully. These initiatives are mainly focused on infrastructure using private-public partnerships. However, SA needs sustainable growth above 3% to make an impact on unemployment. In this podcast, STANLIB Asset Management, Chief...

Tarryn Sankar, Head of Credit in the Fixed Income team at STANLIB Asset Management, says the MTBPS was in line with expectations on fiscal slippage. Notably, the Minister of Finance announced little support for SOEs and specifically did not address Transnet’s financial position. The focus on innovative ways to fund infrastructure projects and create opportunities for the private sector to particip...