The JSE’s torrid March saw the bourse shed more than R3-trillion in value as the raging war in the Middle East weighed on sentiment, marking the worst monthly losses since the 2008 global financial crisis.
The month’s performance marks a stunning reversal in fortunes for a bourse that closed 2025 with a market capitalisation of R24-trillion, with the value of South Africa’s listed equities equivalent to about 313% of GDP.
The first two months of the year saw the momentum from 2025, when the bourse gained about 38%, carry through, with the value of stocks listed reaching a record R26.6-trillion by end-February.
The exchange rounded off March with a total market cap of about R23.2-trillion, a difference of R3.4-trillion, in what is the biggest value destruction in recent memory.
“The all share [index] faced double-digit losses for the month, which will pull first-quarter returns into negative territory. Apart from the general rise in risk aversion, there are sector-specific issues,” Old Mutual Wealth’s Izak Odendaal said in a note.
“Resource shares have taken a beating as precious metal prices pulled back, while higher bond yields have weighed on financials. Nonetheless, the South African equity benchmark is still up about 30% over the past 12 months, putting it well ahead of cash and inflation.”
The domestic share market excelled in 2025, in its best performance since 2005. In dollar terms, it rose 55.3%, significantly outperforming its emerging- and developed-market peers, according to the South African Reserve Bank’s quarterly bulletin.
The strong performance of the all share index last year was due to a convergence of improving macro fundamentals, credible policy and structural reform that underpins a constructive outlook for South Africa’s markets.
The index breached the 100,000-point milestone last year, a symbolic marker of South Africa’s rerating trajectory.
This momentum has, however, been brought to a screeching halt by the Middle East war, which has wreaked havoc on the global market.
South Africa’s bonds, whose yields were at multiyear lows before the war, have risen sharply, which will raise borrowing costs for the country just as they were reaching reasonable levels.
By mid-February, the yield on the 10-year bond was quoted at 7.5%, while those of the 20- and 30-year bonds were approaching 8%.
On Wednesday, however, the yield on the blended 10-year bond was at 9.21%, the 20-year at 9.86% and the 30-year paper at 9.75%.
Herman van Papendorp, head of asset allocation at Momentum Investments, said the escalation of the Iran conflict into an all-out war introduced near-term market volatility, particularly through energy channels.
However, historical evidence suggests that unless such shocks are accompanied by a US recession, their effect on global asset class returns tends to be temporary.
“Against this backdrop, the divergence between global and South African asset classes is particularly pronounced.
“Valuations in developed market equities and bonds are generally elevated, while South Africa’s asset classes continue to embed significant risk premiums despite improving domestic fundamentals, creating a favourable asymmetry between upside potential and downside risk for local assets.”
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