International
December was dominated by the landslide win of Boris Johnson in the UK election as well as the impeachment of Donald Trump by congress in the US. An event which garnered far less attention was the raising of interest rates by the Swedish Riksbank to zero – the first time in five years that the rate has not been negative – despite the fact that the Swedish economy has started to weaken, and this has led some to conclude that the glory days of negative interest rates may be over.

While Boris Johnson’s win in the UK was the most market friendly outcome, there is still plenty required to “Get Brexit done”. The attention of markets will now turn to the trade deal with the EU which Boris Johnson has promised to conclude by December 2020. Until that happens, British assets and the pound will continue to exhibit greater than usual volatility.

In the US, the impeachment of Donald Trump by Congress seems to have been a largely symbolic measure, as the trial to impeach the president has stalled in the Senate.

Global markets continued their inexorable rise on the usual thin December volumes. For the year, all major stock indexes returned double digit returns. Most commodities also rose strongly during the month, concluding a good year for commodities as well.

Unusually, emerging market stocks were particularly strong in December as they rose by 7.4% while the S&P 500 rose by only 3%. However, they continue to trail developed market stocks by a wide margin over longer periods.

South Africa
The South African RMB/BER business confidence index, which is reported quarterly, rose for the first time in 2 years in 4Q 2019. The rand also strengthened by 4.6% during December. When this is added to the 3.3% rise in the JSE’s ALSI, South African stocks returned a tidy 7.9% in USD for the month. Unfortunately, the news flow wasn’t all positive and the unprecedented stage 6 load shedding in December dented much of the resurgent optimism. Lots remains to be done to get South Africa out of its current economic funk and many, including the credit rating agencies, will be watching local economic developments this year closely.