In the Eswatini market, the ESE All Share remained unchanged at E469.88, with limited liquidity. The T-bill market showed a slight downward trend in both short and long-term bills, with competitive yields for 91-day and 273-day bills at 9.25% and 9.99%, respectively. The Eswatini government announced the issuance of government bonds with fixed coupon rates ranging from 10% for 3-year to 11% for 30-year bonds.

In October, Eswatini’s economic indicators displayed notable trends. Gross official reserves decreased by 20.1% MoM but remained stable YoY at E6.9 billion. Credit extended to the private sector grew by 1.8% MoM and 11.6% YoY, reaching E18.6 billion. Broad money supply (M2) increased by 8.0% MoM and 13.5% YoY, reaching E23.2 billion in August 2023. Domestic liquid assets expanded by 10.7% MoM and 7.6% YoY to E7.5 billion. The discount rate and prime lending rate remained unchanged at 7.50% and 11.00% in September 2023.

Headline inflation in Eswatini declined to 3.5% in September 2023, marking the fifth consecutive monthly decrease. However, this decline signifies a slower rate of price increase, driven by global economic shocks, including fuel price increases. The Central Bank of Eswatini expects a moderate increase in the cost of goods and services in 2023 and has revised its inflation forecast down to 4.93%. The IMF has also increased its global inflation forecast for next year to 5.8%.

The consumer is navigating supply pressure due to the Avian Influenza outbreak in South Africa. Africa Chicks suggests Eswatini invest in local self-sufficiency by establishing fertile hatching egg breeder farms instead of relying on imports. South African suppliers have reduced or stopped supplying hatching eggs to Eswatini due to the outbreak. Local producers are temporarily importing fertile hatching eggs from Europe and Brazil to mitigate supply constraints. This may lead to higher prices for chicken meat and eggs.

In the South African equity market, a persistent pullback was observed due to renewed global security concerns stemming from a new Middle East conflict. The Capped SWIX index experienced a 2.93% loss, deepening the year-to-date figure to a negative 3.23%. This downturn affected every sector, with resources down 3.17%, financials down 1.99%, industrials down 4.51%, and small caps down 2.3%. Gold performed well with a 7.32% gain, while Platinum and Silver also saw gains. Despite strong economic growth, equities underperformed, primarily due to rising US interest rates.

Despite robust economic growth in South Africa and worldwide, equities have shown underperformance, primarily attributed to the increase in US interest rates. This trend resulted in negative returns in both South Africa and global markets during October. South Africa’s industrial sector is currently characterized by foreign-focused companies such as Naspers and Richemont. Conversely, the resources sector faced losses due to unfavourable commodity prices, while the financial sector displayed greater resilience. Although South African equities have undergone a notable derating, they present an attractive entry point for investors. The issue of delistings from the Johannesburg Stock Exchange (JSE) continues to be a concern for both investors and the broader economy.

The Eswatini Emalangeni showed a slight recovery but hardly reflected the monthly volatility, closing at E18.75 to the USD, up a mere 0.48%.

The Fund is subject to market risk (volatility) and is not an appropriate investment for short-term investors.

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Holdings and sector weightings are subject to change without notice. Price-to-earnings ratios, price-to-book ratios, price-to-cash flow ratios, and price-to-sales ratios all express the value of a stock’s most recent closing price as divided by the underlying company’s earnings per share, book value per share, cash flow per share, or revenues per share (respectively), all as computed over the previous 12 months. Beta is a quantitative measure of the volatility of the fund relative to the FTSE/JSE All Share index over the past three years. A beta above one is more volatile than the overall market, while a beta below one is less volatile.

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Equity investment risk: Value of equities (i.e. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. bankruptcy), the owners of their equity rank last in terms of any financial payment from that company.

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Currency exchange risk: Changes in the relative values of individual currencies may adversely affect the value of investments and any related income.