The JSE arrested a two-month sell-off to start the second half of the year on a positive note (FTSE/JSE Capped All Share +1.2% MoM). Investment conglomerates, Naspers and Prosus, along with precious metal miners, had shaved 8.5% off the JSE’s 1H26 performance, and a rally in this grouping helped drive the JSE into positive territory in July. Gold miners (-3% MoM) were unable to capitalise on a 1% MoM bounce in the yellow metal price, but platinum miners (+7% MoM) benefitted from a more substantial bounce in the platinum price (+6% MoM). Naspers and Prosus (+6% and +8% MoM, respectively) benefitted from a rally in Chinese stocks, with the pair’s largest underlying investment, Tencent, bouncing 11% MoM. Chinese stocks benefitted from a raft of stimulus measures announced during July, as the government mobilised state-linked institutions to support equities and the People’s Bank of China introduced monetary easing measures.
Diversified miners extended their strong start to the year with Glencore (+8% MoM), BHP Group (+4% MoM) and Anglo American (+3.5% MoM) ending July +35%, +42% and +23% YTD, respectively. Sasol (+20% MoM/+83% YTD) followed energy prices higher (Brent crude oil +24% MoM) as the US war with Iran escalated in July. MTN (-10% MoM) was one of July’s bigger disappointments as the share price slumped in response to an apparent slowdown in the Nigerian business and ongoing litigation in the Ghanaian division.
The South African Reserve Bank (SARB) shocked investors at its July meeting by keeping rates on hold, despite the latest headline inflation printing at 5% YoY and core inflation at 4.1% YoY, both well above the SARB’s 3% target. Fuel and insurance costs were the main drivers of the most recent elevated inflation print, while food inflation remained muted off the back of good local agricultural harvests. Investors are anticipating hikes of 0.25% at each of the SARB’s remaining two meetings in 2026. The surprisingly dovish move by the SARB put pressure on the local currency, which fell 0.8% MoM against the US dollar, despite the greenback’s weakness against most major currency pairs in July. The SA government’s 10-year borrowing rate climbed 0.3% to 8.75% during the month.
