Investors head into the new week with the jitters after last week’s market rout wiped almost R2-trillion off the value of SA equities in just two days after US President Donald Trump’s unprecedented tariffs spooked global markets.
The JSE, Africa’s largest stock exchange, lost a further 5.3% on Friday after falling 3.4% on Thursday, resulting in an 8.5% fall for the two days combined.
The losses were the steepest since the early days of the Covid-19 pandemic in March 2020, when share prices tumbled about 10% in a day.
China, the world’s second-largest economy, retaliated against Trump with 34% tariffs on US imports — setting the scene for a full-blown trade war between the economic giants and risking a global recession.
Europe is also contemplating retaliatory tariffs against the US — an outcome that will further hurt global growth and emerging markets like SA.
The rand was not spared the carnage, falling to its worst level since April last year, when it suffered a slump in the weeks of uncertainty leading to the general election. It hit a worst level of R19.22/$ on Friday, sparking fears of an increase in inflation, which has been well within target for some time now.
IMF MD Kristalina Georgieva said the organisation was still assessing the macroeconomic implications of the announced tariffs, “but they clearly represent a significant risk to the global outlook at a time of sluggish growth”. She urged the US and its trading partners to work “constructively to resolve trade tension and reduce uncertainty”.
Losses on the JSE were broadly based on Friday, with resources faring worst, down 10%. Industrials and financials lost 4% apiece as uncertainty over what may happen to the global economy in an aggressive trade war set in.
Sibanye-Stillwater, which had a stellar March, up nearly 50%, lost 20% over the two days. Anglo American Platinum, Impala and Northam were all down more than 14% on Friday.
Gold, with its reputation of being a safe haven, has not been spared the volatility, with gold stocks on the JSE in the red, led by Harmony, Gold Fields and AngloGold Ashanti — all down 8%-9%.
Trump’s tariffs come at a time when the market-friendly government of national unity (GNU) is on life support.
RMB currency strategist Manqoba Madinane said the rand’s recent depreciation reflected heightened tension about the stability of the GNU.
“Global investors are concerned that the GNU may fracture, particularly as the DA has signalled and followed through on its intent to oppose the Treasury’s budget proposals. This has raised the possibility of a GNU reconstitution, potentially replacing the DA with ActionSA,” Madinane said.
“Importantly, this shift does not signal a leftward lean in the GNU policy framework. Once the noise subsides, the rand should find support from the GNU’s continued centrist orientation.”
Should Friday’s rand weakness continue, the local currency might worsen to levels last seen in May 2023 when allegations that SA supplied Russia with arms saw the currency briefly weaken above R20/$.
TreasuryOne currency strategist Andre Cilliers said tariffs were dominating market moves. “Local politics will take a back seat for now, with the DA stating that they will make a decision on whether to remain in the GNU after the outcome of their court case regarding the validity of the budget approval process.”
Economic think-tank Trade & Industrial Policy Strategies said SA had no real capacity to respond in kind to the tariffs because it accounted for only a quarter of a percent of all US trade.
“The new 30% tariff makes no economic sense. Far from being reciprocal, it is six times as high as the weighted average tariff that SA imposes on US imports.
“Furthermore, it exempts platinum, titanium and other raw materials that account for a third of SA exports to the US. These minerals exports are responsible for the trade surplus with the US,” it said.
Update: April 6 2025
This story has been updated with new information.
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