First things first

What we’re about
Afena Capital is an independent investment management firm that was established in 2005 and currently operates in South Africa and Botswana. We are a multi-disciplinary firm with a focus on equity, fixed income and multi-asset class investment strategies. The clients that we serve include institutional clients such as retirement funds, medical aid funds and insurers, as well as individual private clients. We are a majority black owned..

Afena Insights 23rd Edition Dec 2015

AFE Insights DEC15 V2 Page 01

The key global event during the last quarter of 2015 was the US Federal Reserve’s (the “Fed”) decision to raise policy rates to 0.25% from 0% previously, the 1st hike in more than a decade.
The US economy has benefitted from its own internal dynamism as well as the decisiveness of the Fed at the onset of the Global Financial Crisis which has seen the US economy emerge ahead of other key economies, like the Euro Area and Japan. Europe and Japan delayed the adoption of Quantitative Easing (QE), which when added to their demographic headwinds has seen them emerge slowly from the depths of the 2008/09 recession. The current policy divergence has seen large moves in the respective currencies, with the US Dollar (USD) strengthening significantly in anticipation of the 1st interest hike. An unintended result of these ultra-loose monetary policies of the developed economies was a “growth seeking” carry trade1 which led to excessive debt build-up in emerging markets.