Highlights Global Market Themes: Developed markets rise while emerging markets fall; MSCI World up 1.75%, MSCI EM down -1.1%. US Federal Reserve raises the Fed Funds rate by 25 basis…

Here are this month’s highlights: Shares of state-owned enterprises (SOEs) in the Telecom, Energy and Financials sectors also outperformed. They have been boosted by price/earnings multiple expansion, as the value style was in favour and there was positive news about SOE reforms. Overall, the managers we work with remain overweight to high-quality companies in the Consumption, Advanced Manufacturing and New Energy sectors.

Here are this month’s highlights: February registered the first month-over-month increase in home prices after 17 consecutive months of contraction. While the recovery so far has been driven by pent-up demand from people who couldn’t spend during Covid lockdowns, it is too early to observe more sustained growth momentum.

Global Market Themes: Sticky inflation compels the US Fed to hike interest rates by 25bps. Banking crisis, sparked by SVB collapse, forces government to step in. Lending conditions tighten, displaying further signals that the US economy is slowing down. China and EM markets remain buoyant, with the MSCI China Index up 4.5% along with an upbeat Manufacturing PMI of 51.9. SA Market Themes: SARB surprises the market with a 50bps interest rate hike. Rand appreciates 3.3% against the greenback. Loadshedding continues to constrain the economy, while South African PMI prints 48.1. Shoprite plans to open 400 new stores along with its first apparel outlet.

Global Market Themes: US Federal Reserve likely to hike rates by 25bps in March. Chinese markets close lower; rely on domestic consumer to spur growth. Broader markets experience knock-on effects from US interest rate revision. Bank of England expects inflation to fall to 4% by year-end. SA Market Themes: SA markets down for the month. Rand depreciates against all major currencies. Finance Minister Enoch Godongwana outlines greylisting path in the Budget speech. Government pledges to take on R254 billion of Eskom’s debt.

Here are this month’s highlights: In just two years, the MSCI India Index’s weighting to Adani companies increased from 1.2% to 5.8% in aggregate, despite many people’s concerns of poor governance. A key question that arises as a consequence of this saga is whether the “E” (within ESG) was so compelling that the “G” could be compromised. By Western standards, one of the main reasons for the poor governance in emerging markets is due to the presence of a controlling shareholder – usually the founder and their family, or the state. Private enterprises run the risk of being managed for the benefit of the majority shareholder and not stakeholders in general, which in its extreme could lead to fraud. In the private sector, we all know how much value a visionary leader, usually the founder and controlling shareholder of the business, can create over time by focusing on the strategic plans rather than quarter-over-quarter financial results – think of the founders of the great internet companies. While it is not always black or white, we argue that fund managers should always be careful when taking on poor governance as the results could be binary – all or nothing.