Is the world not an interesting place? Just as it looked as if we were going to have a run into a “normal” Christmas season, with the tourism and hospitality sectors recovering some of the losses of the past 2 years, our scientists discover Omicron! The world panics and locks us out of foreign travel. So, not only the fourth wave, but a new obstacle to our recovery process.

 

This time last year the news was of Joe Biden as the new US president, the beginning of the global vaccine rollout, and climate change protests. We noted that Covid infections had surpassed 72 million and 1.6 million people had died from the disease.

 

One year later, Covid infections have surpassed 260 million and more than 5 million people have died. Good news is that countries with high vaccination rates are showing lower death rates. Could this be the weapon that defeats, or at least tames, Covid?

 

Of course, we South Africans are lethargic about vaccinations when we should all have been super motivated to get vaccinated so that our economy could start recovering and creating employment.

The ANC was given a strong message in the municipal elections, but none of the opposition parties looked terribly convincing. The hearings into the riots are underway; let’s hope this is not consigned to the accumulating pile of fruitless commissions.

 

The US in the meantime threw unprecedented money at stimulating their economy, so much so that they now face an inflation rate of more than 6%, something they have not experienced since the 1990’s. Is it a passing wave or a long-term shift? The conversation in many countries is starting to become one of raising interest rates, which could put risk assets, such as shares, under pressure.

 

So what is the good news?

 

We have had a fantastic year in the markets, with our local equity funds growing 27% and our offshore equity funds growing 11% in USD. Local equities and government bonds look like they could be delivering good returns again in the year ahead, so we should be starting to feel a little wealthier.

 

There are green energy projects sprouting all over the country, in the form of massive wind and solar farms. Another 25 projects have been awarded with more to be announced early next year. So, private enterprise may yet rescue us from loadshedding within the next 2 years. We have a new Minister of Finance who is speaking the same language of discipline as his predecessor.

 

Rains have been good, which holds the promise for good agricultural output, aided by the commodity boom which has given a helping hand to our mines and the taxman, but consider the many households who will not have the means to celebrate over the festive season, with unprecedented job losses and inflationary pressures.

 

However, it is summer, and time for fun and holidays in the sun. Enjoy the festive season and put the gloom of difficult times to one side for the moment.

 

We at Ascent Wealth Management wish you all peace and joy and best wishes for the year ahead.