7 February 2022
min read


Markets struggled in November on news of the Omicron variant, which was initially thought to be a more dangerous variant with more mutations. This was on the back of a fourth Covid wave racing through Europe, which had already led to lockdowns.

Globally, supply chain pressures are easing, both China and Japan have announced additional policy stimuli, whilst the US household saving rate continues to drop, supporting consumption. Continued uncertainty around Covid has allowed monetary policy to stay more accommodative for longer. This should allow economies to continue to grow, albeit at a slower, more sustainable rate.

From a South African perspective, some performance has been hampered by a series of poorly timed unfortunate events. Eskom’s ability to supply power rapidly decreased over the course of 2021, bringing the highest amount of load shedding within a single year. This has battered the local economy, as load shedding reached level 4 across the country. Talks of Renewable Energy through the REIPPP Programme remain in the far future, with no real short-term fixes in sight.

The main economic factors impacting the fourth quarter include:

Identification and Panic of Omicron South Africa’s virologists were the first to identify the new strand, but this brilliant discovery had a dire backlash. Countries throughout the world immediately shut borders to South Africa, causing immediate travel restrictions into the county. This dealt the South African tourism sector a massive blow over its most crucial months of the year. What has since transpired is that the Omicron variant appears to be less severe, but more contagious than Delta. Countries have since slowly backtracked on these restrictions.
Global Inflation pressures continues to increase The cost of growth has been high inflation. Developed markets have reached year on year inflation numbers far above comfortable levels, with the United States reaching 7%, the highest since 1982. We expect interest rate increases early in 2022 to help curb these values.


Looking back on 2021, the SA Equity Market had stellar performance across all sectors, as economic growth continued to recover. Value stocks outperformed growth stocks for the first time in 5 years.

SA Bonds ended the year at expected performance. South African cash performed below historical expectations due to Interest rates remaining low to allow for more stimulus for economic growth.

International equities provided great returns for the year, driven mainly by the Developed markets. International and Domestic Property clawed back some of its major losses of 2020. The Rand ended the year negatively but performed well relative to other Emerging Market currencies.

Over 2021 the main topics of economic relevance included:


Covid-19 Vaccinations COVID-19 Vaccines were rolled out across the globe and provided some much needed (but not complete) stability to markets.
Impact of loadshedding Eskom provided the highest number of hours of loadshedding within a single year since the phenomenon began. This consistently hindered  growth within the economy at untimely moments within the year.
Commodities boom The mining sector contributed R128bn to government revenue in 2021/2022 as mineral sales increased 57% year on year.
Global Inflation Year on year global inflation gradually increased throughout the year, with the expected “transitory” inflation of 2020’s stimulus becoming a far more prevalent and worrisome issue as the year unfolded. Continued stimulus at the beginning of the year, combined with supply chain pressures, drove inflation to decade highs by the end of the year.


The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.


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