Market Capitalisation
The total market capitalisation of all ETFs/ETNs, listed on the JSE, rose from R111,0 billion at the end of 2020 to R119,7 billion at the end of first quarter of 2021. This is an appreciation of 7,8%.
| Generally speaking financial markets performed favourably over the first 3 months of this year, as economic recovery from the COVID-19 pandemic now appears to be accepted. Global equities have responded well to the portents for international economic recovery and the South African equity market has continued its revival which started in the final months of 2020. |
One signal of the improved sentiment towards South Africa, has been the relatively strong appreciation of the rand against the US dollar, in particular. This has led to a dampening effect on the rand prices of foreign referenced ETFs/ETNs, which has offset the increase in the dollar prices of these assets. For instance, the MSCI World index (for global equities), in rands, increased by only 4,9% over the first 3 months of 2021, whereas the FTSE/JSE All Share index (for local equities) appreciated by 13,1% over the same 3 month period.
The majority of ETFs/ETNs available on the JSE (more than two-thirds), track foreign assets rather than local equities or bonds. Whilst this has not appeared to impact the public demand for foreign referenced ETFs, and in fact may be providing a buying opportunity to pick up such assets at favourable rand prices, it has meant that the overall market capitalisation of all ETFs has been dampened by the impact of a stronger rand.
No new ETFs or ETNs were issued during the first quarter of this year, so the total number of ETPs remains at 137 (78 ETFs and 59 ETNs).
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