The JSE has shrugged off constant bickering in the government of national unity (GNU), US President Donald Trump’s “Liberation Day” tariffs and heightened geopolitical risks to register one of its strongest first-half performances in 20 years.
The all share index, the broadest measure of SA stock market performance, is on course to breach the 100,000-point mark for the first time in the bourse’s 137-year history, after a strong start to the year following on an equally strong rally since the formation of the GNU a year ago.
At the start of the second quarter of the year, the all share index was just under 90,000 points and has since added more than 7,000 points even as Trump’s tariffs weighed on global markets.
The SA all share is up 14.7% in the first six months of this year, the strongest first-half performance since the 17.4% growth in the first half of 2006.
The SA equity market has experienced one of the broadest recoveries within global equity markets since Trump’s “Liberation Day” tariff scare in early April, according to research by Deutsche Bank.
The research shows that 80% of companies in the top 40 index are trading above their 200-day moving averages.
In another show of resilience by SA Inc, the Deutsche Bank study also shows that the top 40 index was one of the indices with the lowest volatility among its global peers during this time.
“Contrast this with the narrow US equity market rebound (with less than half of companies’ share prices now above their 200-day moving averages) at high volatility (three times higher than for SA),” Momentum Investments head of asset allocation Herman van Papendorp said.
“This may be an early indication that global investors are starting to differentiate between the US and other equity markets in the new era of Trump policy unpredictability, where a large part of his policy package mainly impacts the US.”
Van Papendorp said SA equities remain attractively valued within the emerging market (EM) peer group.
“SA also continues to be a superior dividend payer within EMs, currently at a 27% premium to EM on a forward dividend yield basis (slightly above the 24% historical premium).
“With SA equities a high-beta play on EM equities and trading at a large valuation discount to EM, we maintain a preference for SA equities over EM,” he said.
Gold companies in the top 40 index have enjoyed a purple patch on the local bourse, buoyed by bullion’s record-breaking price streak. AngloGold Ashanti is up 90% since the start of the year, while peer Gold Fields is up 68% and Harmony has surged 62%.
Sibanye-Stillwater, which also has exposure to the resurgent platinum group metals (PGM) sector, has rallied 115% since January. Gold demand is expected to surge further after the decision by US authorities to allow for gold as of this month to qualify as a tier-1 asset under Basel 3 regulations for the banking sector.
PGM stocks, which have struggled over the past few years, have also been on a bull run.
Northam Platinum is up 97% year to date, while Impala Platinum has surged 81% in the first six months of this year.
Valterra Platinum, recently demerged from the Anglo American stable, is up 38%.
The JSE’s big constituents, Naspers and Richemont, have also had a stellar run, up 32% and 18%, respectively.
SA’s nominal bonds are benefiting from the SA Reserve Bank’s push to lower the inflation target to 3%.
“SA vanilla government bonds still provide some of the highest backwards-looking real yields in the world,” Van Papendorp said.
“Positive SA inflation surprises in 2025 and indications from both the SA Treasury and SA Reserve Bank that the country’s inflation target would be lowered are fundamentally supporting local nominal bonds but undermining inflation-linked bonds.”
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