As of 30 September 2025, South Africa’s Johannesburg Stock Exchange (JSE) has delivered one of the world’s best equity performances. The FTSE/JSE All Share Index (ALSI) has increased by 28% year-to-date. This growth figure is one of the best for the JSE in nearly two decades and has seen the local bourse outperform indices like the United States’ (US’s) S&P 500. These results are underpinned by rising commodity prices and a stronger rand. However, local equity performance still faces challenges.
The equity rally: driven by a narrow range
Despite global challenges such as US trade tensions and geopolitical conflicts, South Africa’s equity markets have performed exceptionally well in 2025. The JSE ALSI closed 2024 at 84,090 points; by the end of September 2025, it reached 108,100 points. The growth has been steady throughout the year: the first quarter rose by about 5% due to optimism following the national elections, the second quarter gained 10.2% from resource sector increases and global commodity recovery, and the third quarter continued with further advances. Over the past year, the index is up 30.43%, an undeniably exceptional return.
However, market breadth has been very narrow, meaning a small number of large stocks have been the drivers of performance while others have lagged. The resources sector, which makes up only about one – third of the ALSI’s weight, led with more than 100% year-to-date gains. Gold and platinum miners alone were responsible for gains of between 100% and 200%, accounting for most of the index’s total increase, technology stocks like Naspers have also seen extremely positive gains. In contrast, most other sectors lagged, with financials gaining just 9%, while industrials lost 12%, and clothing retailers dropping significantly.
When looking at the performance of stocks across the board, there is a clear split between stocks focused on local operations and those with international exposure. Currently, approximately two-thirds of the ALSI’s market capitalisation comes from companies with significant overseas activities. Think of companies like Naspers (through its stake in China’s Tencent), Richemont in luxury goods, and Anglo American in global mining. These stocks, often called rand hedges, have benefitted from global factors that are favourable and have contributed most of the year-to-date gains. For example, Naspers and Prosus, which together represent around 20% of the index, each rose more than 50% due to a recovery in Chinese technology stocks. Their largest investment, Tencent, increased 60% year-to-date as the Chinese government supported tech firms in areas like artificial intelligence.
In comparison, local companies such as Mr Price and Truworths, which depend on South African consumers, who are being impacted by high interest rates, unemployment which stands at 32.9%, and policy issues which impede consumer spending, fell by 30% and 45%, respectively.
Gold and platinum drive equity performance
While several factors have supported the ALSI’s performance in 2025, precious metals prices have been the main driver. Commodities like copper, iron ore, and nickel have increased, supporting resource companies that form a significant part of the index, but it is gold and platinum prices, which rose more than 40% year-to-date, due to strong demand from investors and, for platinum, limited supply that have been the key drivers of performance.
Gold prices reached over $3,896/ounce by early October, up more than 45% year-to-date, driven by a weaker US dollar, expectations of United States (US) Federal Reserve rate cuts, and safe haven demand during the US government shutdown and geopolitical tensions. Central banks have continued buying gold to diversify reserves. The 2022 freezing of $300 billion in Russian assets by the US and allies accelerated this trend, as it showed risks in holding US-dollar assets. Countries like China, India, Turkey, and Russia increased gold purchases, viewing it as protection against US sanctions. As a result, major South African gold shares have risen by between 100% and 200% since the start of the year.
Platinum shares experienced similar gains, helped by the fact that the platinum price has risen by nearly 75% since the beginning of the year. The platinum market has experienced persistent deficits due to production cuts, an upswing in investment and jewellery demand and an improved outlook for demand from internal combustion and hybrid powered vehicles. These precious metals stocks, about one-third of the ALSI, have far outpaced domestic companies.
Domestic drag on equity
Local stocks, representing one-third of the market, such as those in retail like Shoprite or banking like Capitec, only gained 10% to 25%. They have been held back by high interest rates, which has reduced borrowing and spending, plus unemployment and policy delays. As such, domestic stocks have underperformed.
The local economy also faces issues from government policies and an unstable Government of National Unity (GNU). On a positive note, the end of loadshedding has supported some recovery in industry and mining, but problems in transportation continue to limit growth. Without changes to these structural issues, sustained economic progress will be difficult, and investor confidence may remain subdued.
The political environment remains challenging. One year into the GNU and public trust has waned. The much-anticipated policy reforms in labour, governance and the economy remains elusive while corruption continues to erode confidence. Unsurprisingly, local and foreign direct investment levels are at multi-decade lows.
South Africa’s geopolitical choices have added to the economic challenges. South Africa’s neutral position in the Ukraine-Russia conflict and its case at the International Court of Justice against Israel, has attracted harsh criticism from the US. To date, the US’s 30% tariff has hurt the citrus and auto parts sectors. However, South African corporates are creative and resilient and exports have been redirected into Europe and our allies in BRICS, with the result that broader damage has been limited.
Green shoots for local equities
The split between local and offshore stocks shows how international revenues have protected the index from domestic weaknesses. Domestic stocks, however, are likely to face a modest cyclical rebound in economic conditions over the next six to 12 months. South African gross domestic product growth is expected to reach 1.3% for the year, up from just 0.6% in 2024, helped by better electricity supply and larger contributions from mining and agriculture. Reforms in energy, including more private renewable sources, offer long-term benefits, but infrastructure challenges with water and transport are ongoing risks.
Inflation has stayed near the lower end of the South African Reserve Bank’s target of 3% to 6%, which allows for further monetary easing over the next 12 months. Rate cuts could provide a welcome boost to struggling middle- and lower-income households.
As we take a deeper look at the numbers, we also see some positives for local shares. Earnings growth for JSE-listed companies has been steady but varied in 2025. Overall earnings per share for the ALSI is up more than 20% for the year to date, led by gold shares and technology. Although gold equity earnings varied widely, all counters reported half-year earnings growth of more than 30%. By comparison, domestic company earnings looked pedestrian but measured against expectations, they were better. The banking sector has generally been better than expected with solid results from FirstRand and Absa. Capitec, however, stands head and shoulders above its peers, with its latest report showing growth of more than 25%. On the industrial side, Bidvest, Remgro and Reunert all beat expectations, and in the process, showcased the resilience of their business models in tough times.
Market outlook: positive with caution
In summary, The JSE All Share Index’s 28% year-to-date gain through September 2025 shows the South African market’s resilience in the face of domestic challenges. For the rest of 2025, the outlook for the ALSI earnings growth is strongly positive, led by the precious metal counters. Local counters also stand to benefit from a modest improvement in economic growth, stable inflation, potential rate cuts and ongoing commodity demand. But risks remain. Investors should keep a keen eye on geopolitical tensions as well as the state of the GNU.
