Financial markets were buoyant in August despite facing some headwinds from China and the resurgence in Covid-19 cases driven by the Delta variant. Equities remained in play supported by exceptional earnings prints and a cautious tapering narrative created by the Fed governor, Jerome Powell, at the Fed’s annual Jackson Hole symposium.
Emerging market equities bounced from a lacklustre performance in July to deliver a healthy 2.6% return. South African equities lagged peers as the JSE All-Share Index closed 1.7% lower dragged by Naspers, Prosus and resources which all had China as their common detractor. Naspers and Prosus continued to be weighed by a regulatory crackdown on the Chinese IT sector. Otherwise, financials had a fantastic run in August with the JSE Financials Index rising 12.4%.