SA’s inflation rate for April, at 2.8%, is fairly subdued, partly because prices of goods being imported from China are in deflation. A cut of 25 bps by the SARB later this week would be justified, given both low inflation and low growth forecasts, and would provide welcome stimulus for the economy in the second half.

The US tax bill proposed by President Trump would deliver fiscal stimulus to the economy, but it will also significantly add to government debt. The US bond market has reacted negatively to approval of the bill by the House of Representatives. The stimulus will occur at the same time as tariffs push prices higher, and could result in entrenched higher inflation.

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In this podcast, Sylvester Kobo, STANLIB’s Deputy Head of Fixed Income, discusses the implications of the third iteration of the 2025 Budget on the bond market. He highlights how the Budget could affect fixed income investments, particularly in light of lower GDP growth and inflation forecasts. Discover why the bond market reacted with slight weakness and what it means for future investment strategies.

Budget 3.0 was in line with expectations, although the small increase in the fuel levy was an unwelcome surprise, says STANLIB Chief Economist, Kevin Lings in this podcast. After discussing some of the detail in the numbers, Kevin warns that the South African government’s fiscal position will remain under pressure until the country is able to lift its GDP growth rate above 3%.

Any commentary or forecasts indicated in this document are for information purposes only and not guaranteed to occur.

STANLIB is an authorised Financial Services Provider in terms of FAIS and a registered manager in terms of CISCA.

US inflation and consumer sales data for April showed no signs of tariff pressures. US inflation was 2.3%, just above the 2% target, but over the next 12 months tariff hikes will push it up by 1-1.5%, as well as cause a slowdown in growth and higher unemployment levels. In SA, the Q1 2025 unemployment rate climbed to almost 33%, which was disappointing, although partly seasonal. In Budget 3.0 this week, government is likely to revise down the economic growth rate to 1-1.5% but no significant tax changes are expected.

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The US has agreed to cut US import tariffs on products from the UK from the previously proposed level, with certain exclusions, in a deal that is likely to set the tone for other US negotiations. This will help to ease concerns about US inflation. Meanwhile, in SA, manufacturing data for March was down a disappointing 0.8% year on year, despite more stable electricity supply. Weakness in the manufacturing sector is likely to drag down GDP growth for the year.

In this podcast, Wehmeyer Ferreira, COO of STANLIB’s Outcomes Franchises, chats to Amit Parmar, investment specialist in J.P. Morgan Asset Management’s International Equity Group, about how the Global Select Fund has adjusted its positioning. They also discuss some of the opportunities the teams have identified amid the upheavals.

Any commentary or forecasts indicated in this document are for information purposes only and not guaranteed to occur. Additional information about products/funds is available on the Minimum Disclosure Document/Factsheets which can be obtained from the website (www.stanlib.com).

STANLIB is an authorised Financial Services Provider in terms of FAIS and a registered representative manager in terms of CISCA.

STANLIB Asset Management (Pty) Ltd is an authorised financial services provider and J.P. Morgan Asset Management (UK) Limited is an offshore strategic partner to STANLIB Asset Management (Pty) Ltd and is authorised and regulated by the UK’s Financial Conduct Authority.

US GDP dropped by -0.3% q/q in the first quarter of 2025, raising fears the economy is heading for a recession. The main reason was a 50% q/q increase in US imports in anticipation of tariff increases. However, it will take a couple of months before the impact of tariffs and consumers’ reaction to them will become fully evident. Latest US employment data, a critical gauge of the performance of the economy, shows 177 000 jobs were added in April, well above expectations, and the jobless rate was unchanged at 4.2%.

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Events in SA, the US and Europe in Q1 were seismic for markets, says Marius Oberholzer, STANLIB’s Head of Multi Asset. The team has become progressively more cautious than it was at the beginning of the year. During the quarter it reduced the positions in global equities and domestic fixed income and removed all rand currency hedges. Marius discusses the team’s view on gold and gold equities, regional and thematic exposure.

Any commentary or forecasts indicated in this document are for information purposes only and not guaranteed to occur. Additional information about products/funds is available on the Minimum Disclosure Document/Factsheets which can be obtained from the website (www.stanlib.com).

In Q1, positive news on domestic inflation and progress on Treasury’s fiscal consolidation plans were countered by disagreements around the South African Budget and tariff announcements from the US, says STANLIB’s Deputy Head of Fixed Income, Sylvester Kobo. As a result, bond yields drifted higher through the quarter. Sylvester analyses the positioning of the Flexible Income Fund amid the heightened uncertainty and whether domestic interest rate cuts are likely.

Any commentary or forecasts indicated in this document are for information purposes only and not guaranteed to occur. Additional information about products/funds is available on the Minimum Disclosure Document/Factsheets which can be obtained from the website (www.stanlib.com).

STANLIB’s Head of Systematic Solutions Rademeyer Vermaak describes Q1 as “wild”. It showed the impossibility of predicting what politicians will do – in both the US and SA. He explains what drove SA equity prices and how the managers of STANLIB Enhanced Multi Style Fund, which is a long-term fund, respond to short-term upheavals and neutralise risk. Rademeyer also spells out why the fund has taken overweight positions in Harmony Gold, Clicks and Capitec.

Any commentary or forecasts indicated in this document are for information purposes only and not guaranteed to occur. Additional information about products/funds is available on the Minimum Disclosure Document/Factsheets which can be obtained from the website (www.stanlib.com).