South Africa has one of the best-performing stock markets in the world
The JSE was one of the best-performing global stock markets in November, with the bourse boosted by sky-high metal prices.
The FTSE/JSE Capped SWIX Index rose by 2.3% month-on-month. The only major bourse to outperform it was the Brazilian Bovespa (up +6.4% MoM).
Peter Little, Fund manager at Anchor Capital, said that the November rally pushed the FTSE/JSE Capped SWIX Index to a 51% year-to-date gain in dollar terms.
Only the Bovespa and the Spanish IBEX 35 (+53% and +64% YTD, respectively, in US dollar terms) have outperformed thus far in 2025.
Little said that precious metal miners were back as the driving force of JSE returns in November, with gold and platinum miners up 13% MoM in aggregate.
Gold and platinum prices rallied roughly 6% MoM, leaving these precious metal prices 62% and 84% higher, respectively, since the start of the year.
JSE-listed investment holding companies Naspers (-12% MoM) and Prosus (-10% MoM) were the biggest detractors from the JSE’s overall performance in November.
The performance of the technology giant was far worse than its largest investment holding, Chinese tech conglomerate Tencent (-3% MoM).
Although the group has shown strong execution under new CEO Fabricio Bloisi, the share price reacted poorly to its latest earnings release.
“Investors appeared concerned about the lack of clarity around future share buybacks, as the company signalled an unwillingness to sell down more Tencent shares to fund buybacks,” said Little.
Nevertheless, South Africa’s medium-term budget policy statement (MTBPS) was well received by investors.
Finance Minister Enoch Godongwana has delivered on good fiscal discipline, anchoring future expenditure and borrowing growth to the country’s new 3% inflation target.
The South African Reserve Bank also unanimously voted to cut rates by 0.25%, taking the prime lending rate to 10.25% following six cuts since September 2024.
The government’s 10-year borrowing yield also continued to fall in November, ending the month at 8.5% p.a. – the lowest rate in almost five years.
The rand strengthened 1.3% MoM against the generally weaker US dollar, leaving it 10% stronger against the American currency since the start of the year.
International investors still not keen
Anchor Capital are not the only investor to highlight South Africa’s strong performance, with Morningstar noting that South African markets have been quietly one of the best in the world in 2025.
Morningstar noted that opportunities are still available for South African investors, notably diversified miners and the nation’s five largest banks.
Although buying local may be suitable for South African investors, Morningstar said that this is not necessarily the case for international investors.
While attractive valuations can compensate for increased liquidity and currency risk, Morningstar noted that the opportunity cost of high valuations is not taken into account when considering other emerging markets.
Morningstar Chief Research and Investment Officer Dan Kemp stated that the South African market is priced at fair values, while markets such as Brazil and Mexico appear relatively cheaper.
South Korea and China also have access to higher-quality technology opportunities than South Africa does.
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