THE DAILY BRIEF MARKETUPDATE WEDNESDAY,20JANUARY2021 GLOBAL MARKETS - CAPRICORN ASSET MANAGEMENT

The Daily Brief

Market Update                                              Wednesday, 20 January 2021

Global Markets
Asian shares climbed to a record high on Wednesday as U.S. Treasury Secretary nominee Janet
Yellen advocated for a hefty fiscal relief package to help the world's largest economy ride out a
pandemic-driven slump. At her confirmation hearing on Tuesday, she said the benefits of a big
stimulus package are greater than the expenses of a higher debt burden.

U.S. President-elect Joe Biden, who will be sworn into office on Wednesday, last week laid out a $1.9
trillion stimulus package proposal to boost the economy and speed up the distribution of
vaccines. "There will be a large-scale fiscal spending. The Fed is seeking to achieve two percent
inflation and full employment, which still look distant, so it will keep interest rates low for some time
and market sentiment should remain robust," said Yoshinori Shigemi, macro strategist at Fidelity
International.

MSCI's Asia-Pacific index outside Japan rose 0.95%, reaching its highest level ever. Hong Kong's
Hang Seng rose 1.0% to approach its 2019 peak while Australian shares added 0.6% to reach an all-
time high. Japan's Nikkei, however, slipped 0.45% on profit-taking. The U.S. Nasdaq futures gained
0.4%, with Netflix shares jumping 12.6% after the bell as the streaming pioneer reported strong

growth in subscribers and projected it will no longer need to raise debt. The results came after all
three major Wall Street indexes posted solid gains on Tuesday.

U.S. President Donald Trump, in a farewell address released on Tuesday, touted his legacy and
wished luck to the new administration even though he steered clear of acknowledging his successor
by name. Biden will take office on Wednesday under unprecedented security measures after the
Jan. 6 assault on the Capitol. "The transition will likely be smooth and hassle-free, so that's another
reason supporting markets overall," said Yasutada Suzuki, head of emerging markets investment at
Sumitomo Mitsui Bank.

In the currency market, the dollar was on the back foot against other currencies. The euro stood at
$1.2148, up 0.15% and off Monday's 1 1/2-month low of $1.2054, drawing support from a ZEW
investor sentiment survey that beat forecasts and the Italian government surviving a confidence
vote. The yen was little moved at 103.81 to the dollar while the Chinese yuan ticked up about 0.1%
to 6.4741 per dollar.

Oil prices rose on hopes that Biden's proposed stimulus will lift economic output. U.S. crude futures
inched up 0.3% to $53.15 a barrel while international benchmark Brent futures rose 0.3% to $56.09
per barrel.

Domestic Markets
South Africa's rand rose strongly on Tuesday, helped by a surge in global risk appetite as investors
expected Janet Yellen to use her confirmation speech as U.S. Treasury Secretary to lay out the case
for more stimulus spending.

At 1620 GMT, the rand traded at 14.9850 versus the U.S. dollar, 1.2% firmer than its previous close
and breaking below the 15 per dollar mark for the first time in two weeks.

The dollar tumbled before Yellen's testimony on Tuesday, when she was expected to urge
lawmakers to "act big" on the next coronavirus relief package. The rand has mainly taken its cue
from global drivers so far this month in the absence of major local data releases. But this week that
changes with releases including retail sales figures for November and the December consumer price
index.

Mining output slumped 11.6% year on year in November, data on Tuesday showed, extending
output declines seen in previous months.

On Thursday, the central bank will announce its latest interest rate decision. Most economists
expect it to hold the repo rate at 3.5%, but a small minority is predicting a rate cut.

Shares on the Johannesburg Stock Exchange were mixed on Tuesday, with retailers gaining and
miners falling. The benchmark All-share index was down 0.17% at the close at 63,603 points. The
bluechip top-40 index ended down 0.32% at 58,359 points. The general retailers index was up
almost 6% at market close, helped by gains for companies such as TFG which reported a 5.5% rise in
third-quarter turnover.

Government bonds firmed slightly, with the yield on the R2030 dropping 1.5 basis points to 8.755%.

Corona Tracker

Market Overview

Notes to the table:
    The money market rates are TB rates
    “BMK” = Benchmark
    “NCPI” = Namibian inflation rate
    “Difference” = change in basis points
    Current spot = value at the time of writing
    NSX is a Bloomberg calculated Index

Important Note:
This is not a solicitation to trade and CAM will not necessarily trade at the yields and/or prices
quoted above. The information is sourced from the data vendor as indicated. The levels of and
changes in the yields need to be interpreted with caution due to the illiquid nature of the domestic
bond market.

                                                                                 Source: Bloomberg

      For enquiries concerning the Daily Brief please contact us at
                            Daily.Brief@capricorn.com.na

Disclaimer
The information contained in this note is the property of Capricorn Asset Management (CAM). The
information contained herein has been obtained from sources which and persons whom the writer
believe to be reliable but is not guaranteed for accuracy, completeness or otherwise. Opinions and
estimates constitute the writer’s judgement as of the date of this material and are subject to change
without notice. This note is provided for informational purposes only and may not be reproduced in
any way without the explicit permission of CAM.