Prowess Investment Managers

Fixed Income Analyst Taku Makotore looks back at the themes which framed 2025 and explores what markets might expect from 2026…

Fixed Income Head Qhivi Tiva and Assistant Portfolio Manager Cyril Tshehla were thrilled to receive the award on behalf of the Prowess team at the recent ABSIP Awards Dinner.

Globally, US President Trump confirmed that he has decided who will succeed Jerome Powell as Fed Chair and locally Moody’s kept its credit rating of South Africa unchanged.

Last week, markets perked up as the odds of a US Fed rate cut on 10 December jumped to 90% – from just 30% a few weeks back – thanks to soft American data and chatter that Kevin Hassett is in pole position for Fed Chair. Locally, the SARB’s MPC delivered a unanimous 25bps repo cut to 6.75% on 19 November – its third in a row, totalling 150bps of easing since September 2024.

Last week, US nonfarm payrolls showed that the labor market added 119k jobs in September, while the unemployment rate rose to 4.4% in September from 4.3% the month prior. Locally, the South African Reserve Bank (SARB) cut the repo rate by 25 basis points to 6.75% in line with our expectations.

Last week, US President Trump signed legislation to end the US government shutdown, while locally, finance Minister Enoch Godongwana tabled the 2025 MTBPS, preserving the crucial debt-to-GDP peak at 77.9% this year while adopting a 3% inflation target and reinforcing fiscal consolidation. SA’s sovereign credit rating was upgraded by S&P.

Last week, the US government shutdown extended into its sixth week, delaying key economic data releases and complicating Fed policy decisions. Global markets navigated persistent uncertainties, with Fed officials debating the pace of rate cuts amid inflation concerns. Locally, South Africa’s PMI signalled contraction, while experts anticipated a cautiously optimistic Medium-Term Budget Policy Statement (MTBPS) amid brighter fiscal prospects.

Last week, the Federal Reserve lowered the federal funds rate by 25 basis points, its second consecutive cut, citing rising risks to employment and slowing job gains. Locally, South Africa’s PPI inflation rose for the fourth straight month to 2.3% year-on-year in September from 2.1% the month prior. The print was below market expectations of 2.6%.

Last week, global financial markets focused on the easing in trade tensions between the US and China, while locally South Africa’s exit off the greylist.

Last week, the IMF raised its global growth forecast for 2025, while Global markets continued to navigate the US government shutdown. Locally, Electricity Minister Dr Kgosientsho Ramokgopa unveiled the Integrated Resource Plan (IRP) 2025, aiming to transform the energy sector into an industrialisation and job creation driver