Finance

Coronation sends a warning about South Africa

Luke Fraser

 ·26 May 2026

Coronation Fund Managers says that the impact of the war in Iran will lead to increased pain on South African households and deal a blow to the nation’s economy just as it was turning a corner.

Coronation said that the six months ending 31 March were split into two distinct halves, which included initial market highs followed by the chaos caused by the Iran War.

The asset manager, which manages R746 billion in total assets under management, said global markets ended 2025 on a high note amid resilient growth.

The market was then thrown into chaos by the sudden escalation of conflict in the Middle East and the closure of the Strait of Hormuz in early March.

“What had been a constructive start to the year gave way to a sharp risk-off move, as the geopolitical and economic consequences of the conflict became apparent,” said Coronation.

“The oil crisis has affected all economies and will profoundly affect geopolitics and geoeconomics for years to come.”

In South Africa, there is concern about the resulting impact on households on the nation’s early economic recovery.

It said that a sharp rise in fuel prices would impact all parts of the economy and stretch already-limited household budgets.

The rise in fuel prices led to inflation reaching 4.0% in April. Given that this is at the upper end of the Reserve Bank’s tolerance band, interest rate hikes are now expected.

The International Monetary Fund (IMF) recently reduced its growth estimate for South Africa to 1.0%, down from its previous projection of 1.4%.

However, Coronation said that it’s not all doom and gloom, with some encouraging signs.

This includes South Africa exiting the grey list in late 2025, an upgrade in credit rating from S&P that followed soon after, and improvements at state-owned entities.

It added that South Africa now also has a stable power supply, and that there has been tangible progress in energy reforms, with early signs of recovery in transport and logistics.

“The appetite from the government to involve the private sector, leveraging available skills in assisting with these reforms, is to be commended,” said the group.

“This reform momentum will likely increase as private sector participation gains traction. However, water infrastructure and supply remain of grave concern, as does the condition of many of our municipalities.”

It added that business and investor confidence should continue to improve as the Government of National Unity (GNU) matures.

“The 2026 Budget underscored a commitment to fiscal discipline, and we are seeing clear signs of improved governance in several key ministries,” said Coronation.

Nevertheless, the group noted that the world is in a period of heightened volatility and uncertainty, as one crisis cascades into the next.

Financials

Looking at the group’s financial results for the six months ended 31 March, its revenue increased by 3% to R2.08 billion compared to the prior corresponding period.

Earnings per share increased by 6% to 218 cents per share, from 205.1 cents per share in the prior corresponding period.

Fund management earnings per share increased by 2% to 203.7 cents per share. However, headline earnings per share declined by 5% to 195.1 cents per share.

An interim dividend of 203 cents per share was declared for the period, up by 1.5% from the 200 cents seen in the prior period.