The JSE All Share has outperformed the S&P 500 in dollar terms over the last five years, with the local bourse benefiting from the relative strength of the rand and a strong investment case for local stocks.
South Africa’s equity market has continued to surprise on the upside in 2025 despite the economic uncertainty caused by the US’s tariff regime.
In his “Liberation Day” rally in April, US President Donald Trump announced that South African goods would receive tariffs of 30%.
Although the methodology used to reach the figure has been questioned, Trump has since doubled down on it, setting a start date for the tariffs to take effect on 1 August 2025.
Despite the uncertainty caused by the tariffs and threats around them, Nicholas De Clercq, Quantitative Analyst at Prescient Investment Management, said South Africa’s bourse has delivered exceptional returns.
The South African equity market reached an all-time high this year and has returned 19% since the Trump tariff turmoil began. It has also weathered ongoing conflicts and oil price concerns.
“Combined with the relative strengthening of the rand to the dollar, this has allowed the JSE All Share index to outperform the S&P 500 over the last 5 years in dollar returns,” said De Clercq.
“This outcome is particularly striking considering the strong US equity exceptionalism narrative and the global shift towards dollar-based assets over the past decade.”
He noted that the performance underscores that the JSE All Share Index has been a surprisingly competitive investment for global and local investors.
Although local performance has been strong, foreign investors have remained persistent net sellers of local equities, with nearly R150 billion in net outflows since the start of the year.
The trend shows that the primary beneficiaries of the market’s strong performance have been local and foreign investors, who have chosen to stay, rather than new foreign capital inflows.
A significant reason for the strong year-to-date performance has been the basic materials sector, especially gold miners, who have benefited from the 28% increase in the gold price this year.
Thus, the basic materials sector accounts for roughly 21% of the All Share Index, only slightly behind the financial sector’s 25% weighting.
The telecommunications and technology sectors have also delivered substantial gains, adding to the market’s broad-based rally.
Total Return Index (Source: Prescient Investment Management)
What the tariffs mean for South Africa
De Clercq said that investors will need to keep a close eye on the 1 August deadline, as this presents a new potential wave of uncertainty for markets.
That said, investors can take some comfort in knowing that while tariffs present a once-off upward shock to price levels, they are unlikely to impact long-term inflation expectations.
“Long-term inflation expectations are a key driver of forward returns for all asset classes, including bonds and equities.”
“This component of the forward returns should therefore remain largely unchanged by tariffs even if they do come into effect.”
Old Mutual Chief Economist Johann Els also believes South Africa’s economy should improve shortly despite the US tariffs.
He said that the US economy will likely enter recessionary conditions this year, but key trading partners China and the Eurozone will see strong growth, with the former set for roughly 5% GDP growth.
Free trade will likely continue worldwide outside the US, as consumers continue to demand cheaper prices.
South Africa’s exports to the USA also account for a relatively small 8%, which is unlikely to drop to 0% overnight, with several exemptions also expected.
Els said that the nation’s GDP should improve from the average of 1.1% over the last 15 years to around 2.5% to 3.0% in the medium term.
He believes that stronger consumer spending will drive the increase in GDP, and the nation will also see minimal inflation and a weaker rand in the coming years.
Markets and Indicators:
Name Value Move in %
Rand / Dollar 08:17 17.8946 -0.12%
Rand / Pound 08:17 23.9849 0.24%
Rand / Euro 08:17 20.7740 -0.05%
Rand / Swiss Franc 08:15 22.3536 0.01%
Gold (usd/oz) 08:16 3 340.77 0.50%
Platinum (usd/oz) 08:16 1 381.50 -0.85%
JSE Shares Up/Down:
Large Caps
Name Value (R) Move (R) Move in %
EXX: EXXARO 173.27 4.18 2.47%
NPN: NASPERS-N 5,545.38 124.39 2.29%
PRX: PROSUS 1,011.99 19.99 2.02%
CLS: CLICKS 362.35 6.95 1.96%
All Share (J203) 97 019 0.23%
All Share Industrial (J257) 144 840 0.48%
Financials (J580) 52 792 0.22%
Top 40 (J200) 89 304 0.29%
Industrial 25 (J211) 136 566 0.54%
Financial 15 (J212) 20 715 0.22%
Resources 10 (J210) 80 245 -0.14%
Financial data provided by: iress, 15min delay
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Updated: July 2025
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