Markets Update | With Viv Govender, Portfolio Manager at Rand Swiss

Añadido: 2026-06-02

[00:00:01]Right, let's uh take you to the markets to get a sense of what developments are panning out there. I'm now joined by Viv Govender, who's portfolio manager at Rand Swiss. Viv, a very good afternoon to you. Thank you so much for your time.

[00:00:13]Markets seem to alternate between pricing peace and pricing conflict. What does this tell us? I mean, are investors becoming desensitized to geopolitical risk at all?

[00:00:25]>> I don't think you can be. I mean, the US markets are seeing a bit of, you know, you know, good strength coming through, especially from the tech sector, which has been driving things. That's kind of the AI hype that's at the moment, uh, really pushing those markets higher.

[00:00:37]We've seen some incredible moves in the US, but also places that are, uh, linked to this, Taiwan and especially South Korea, which has done incredibly well over the last year. But in South Africa, we really can't, you know, escape the war because of the fact that, you know, it affects us directly via the, you know, obviously, the cost of petrol, which is going to change, you know, uh, uh, this week, as well as diesel as well. But also due to the fact that, you know, we are affected by the currency movements as well that have been, you know, obviously, um, being moved by this, uh, particular conflict.

[00:01:05]>> Mhm. Mhm. The rand, at the same time, has strengthened to around 16.22 to the dollar. What's driving that move?

[00:01:15]>> A hope of a resolution. I mean, apparently, there was a deal on Donald Trump's table this weekend. Uh, he's come back and said he doesn't like it, uh, particularly. It's kind of strange that he's negotiated negotiated a deal that he has to negotiate afterwards.

[00:01:27]It's a, you know, it's a double, actually it comes to a uh, gate here to cross basically to have the US agree to something, but, uh, apparently, the deal made between the US negotiators and Iran, uh, was still put before Trump, and he doesn't like it at the moment. He's going to, you know, ask for some changes to be made. Uh, that I think is the big, um, you know, driver in the market, especially around things like the oil price. I mean, the oil price at the moment, yes, it's at about mid-90 for, uh, you know, Brent crude oil, but I mean, a couple of weeks ago, it was basically, uh, well above 100.

[00:01:57]And the move we've seen has been based on this hope of a resolution.

[00:02:01]>> Yeah. Now looking locally at movement in the retail space, Friday's sell-off was led by retailers with Spar plunging almost 15% and Dis-Chem down nearly Is it a warning at all that South African consumers are running out of spending power?

[00:02:22]>> Oh yeah, most certainly. We've seen for instance because the retail sector kind of stalled in the first quarter of the year.

[00:02:29]That's obviously been a a major issue as well as the fact that you know this is a a sector despite the fact that it's you know one of the oldest sectors out there is going through one of the biggest you know changes that we've seen.

[00:02:39]>> Mhm.

[00:02:39]>> Uh e-commerce, you know, deliveries, etc., etc. are really changing the landscape.

[00:02:44]I mean to get an idea, Shoprite's 60/60 sales probably does as much business at the market cap of Pick n Pay or Spar.

[00:02:51]That's a a huge amount of you know revenue going to that company.

[00:02:54]>> Uh >> So I do think that this is a unusual business in terms of it's very you know old but also very innovative at the moment.

[00:03:02]But I do think that the underlying factor is that the consumer is under pressure. And I guess it's for instance with the petrol and diesel prices the way they are, you have to spend that money because it's on petrol and diesel as opposed to going to you your local shop and buying food or whatever else.

[00:03:14]>> Yeah, because we also saw sharp declines in Pick n Pay, Shoprite, and Clicks.

[00:03:18]Surely an indication that households are becoming far more selective about where they spend their money because of of the restrictions.

[00:03:29]>> Oh yeah, most certainly. I mean you you basically if you if you see the petrol price and the diesel price go up as much as they are, that money has to come from somewhere else. And what are you going to do? Discretionary spend is obviously going to be affected. At the same time I mean we we could be seeing you know down the line some some price increases also coming to play down the line. You would expect that to basically you know boost some of the expenditures and things that might be you know more long-lasting and I think that's what we saw there. We saw for instance, you know, some of the more durable goods that go up a little bit in terms of spending for the first quarter, but I think the overall consumer is under pressure at the moment.

[00:04:01]>> Yeah, absolutely. Thank you very much.

[00:04:03]Thanks for speaking to us this afternoon giving us a sense of how the markets are moving. Viv Govender, portfolio manager at Rand Swiss.