Face-Ripping Rally on the JSE:

• Surge attributed to the formation of a coalition government involving ANC, DA, and IFP.
• Top 40 index rose 3.5%, a significant increase not seen since February 2018.
• The rally, likened to the start of a marathon, suggests potential long-term growth, despite possible volatility.

RAND and Resource Stocks:

• RAND trading under 18, affecting resources positively.
• Potential for RAND to strengthen further, possibly reaching 17.

Coalition Government and Market Impacts:

• The coalition’s stability is uncertain but critical for long-term market confidence.
• JP Morgan upgraded South Africa from underweight to overweight, signaling positive outlooks.

SA Inc Stocks and ETFs:

• Retailers like Shoprite*, Mr. Price*, Foschini Group*, and Truworths hitting 52-week highs.
• ETFs for local investors, focusing on SA Inc..
• Recommendations include avoiding heavy Rand Hedge dual-listed miners in a strong RAND environment.

RSA Retail Savings Bonds:

• Interest rates for RSA Retail Savings Bonds to drop in July.
• Current rates: 11.5% for a 5-year bond, expected to decrease to 10.75%.
• Opportunity to reset bonds before the rate change on the 20th of the month.

Inflation and Interest Rates:

• Local CPI stable at 5.2%, within the target band but aiming for 4.5%.
• US FOMC holds rates steady, hinting at a possible future rate cut.
• Prospects for lower local interest rates and their impact on retail stocks and disposable income.

Market Opportunities:

• Interest in retailers and brokers like Purple Group* and PSG Konsult, considering the potential increase in disposable income and trading volumes.
• Positive long-term outlook, but caution against immediate full investment.

Simon Brown

* I hold ungeared positions.