Business

Against All Odds, the JSE Is Outshining Wall Street in 2025

Published

2 months ago

July 18, 2025

Chiraag

JSE 2025 performance, South African stocks, outperforming S&P 500, rand strength, gold mining rally, Trump South Africa tariffs, Nicholas De Clercq, Joburg ETC

SA Stocks Are Soaring While the World Holds Its Breath

While the rest of the world watches markets tumble under trade war threats, South African stocks have quietly become one of 2025’s biggest financial plot twists. The JSE All Share Index is not just growing; it’s outperforming the mighty S&P 500 in dollar terms. Yes, that S&P 500.

It’s a turn of events that’s caught many global investors off guard, especially considering the uncertainty around US tariffs and a jittery global economy.

A market that refuses to flinch

At the centre of the story is a market that’s done more than just survive; it’s thrived. Since US President Donald Trump’s “Liberation Day” rally in April, where he announced a 30% tariff on South African goods, many expected local markets to wobble. Instead, the JSE has powered forward, delivering a 19% return since the announcement.

According to Nicholas De Clercq, a quantitative analyst at Prescient Investment Management, the JSE’s five-year dollar returns now outpace the S&P 500, thanks in part to a resilient rand and strong local performance, particularly in the basic materials sector.

Gold glitters, and miners cash in

One of the biggest drivers of this rally? Gold. With the global gold price jumping 28% this year, South Africa’s gold mining giants have seen massive gains. The basic materials sector now makes up 21% of the All Share Index, just behind financials at 25%.

But it’s not just about the miners. Tech and telecom stocks have also surged, helping the local market post broad-based gains that few expected in a year marked by international economic tension.

Foreign investors are pulling out, but locals are winning

Here’s the twist: while the JSE is booming, foreign investors have been net sellers, pulling out around R150 billion since January. In other words, it’s the locals and the few foreigners who stuck around who are benefitting most.

Despite the outflows, the JSE’s rally shows that strong fundamentals can still deliver, even without constant international capital inflows.

But what about those US tariffs?

The looming 1 August 2025 start date for the Trump tariffs remains a concern. But analysts say the long-term impact may not be as dramatic as headlines suggest.

De Clercq points out that while tariffs can cause a temporary price shock, they’re unlikely to dent long-term inflation expectations, which are a key driver of forward returns. In simple terms, markets may wobble, but the underlying value won’t vanish.

Old Mutual’s Chief Economist, Johann Els, shares that view. He believes that despite US pressure, South Africa’s economy could actually improve, with stronger GDP growth on the horizon and less reliance on the American market, which only takes about 8% of SA’s exports.

The bigger picture: SA’s quiet strength

Looking forward, Els forecasts 2.5% to 3% GDP growth, up from the sluggish 1.1% average of the past 15 years. Driving that growth? Consumer spending, stable inflation, and a weaker rand, which supports exports to key partners like China and the EU.

It’s a story of local resilience in a world tilting toward protectionism. While other economies battle recession fears and trade war fallout, South Africa’s stock market is showing it still has serious muscle and maybe a few surprises left.