South African (SA) equity markets had a solid end to 1H25 (FTSE/JSE Capped SWIX Index +2.2% MoM), leaving the local bourse up 16% YTD. Gold shares (+76% YTD) were responsible for most of the JSE’s performance in the early part of the year, but platinum miners (+19% MoM and 83% YTD) have taken the baton in the past few months, with the precious metal miners accounting for more than half of the JSE’s returns YTD between them. The platinum price (+28.5% MoM) is up 50% YTD, reaching its highest level since 2014, as industry experts predict that strong demand and constrained supply will keep the metal in a supply deficit for multiple years.
Investment holding companies, Naspers and Prosus, have been another strong contributor to JSE returns in 2025 (+32% YTD). While their largest investment (Chinese tech conglomerate, Tencent) was responsible for much of the gains in the early part of the year, it was the prospects of their other investments that drove the strong performance of the investment companies in June (+7% MoM). The Prosus Capital Markets Day left investors feeling optimistic about the new management team’s focus on the profitability of the company’s other investments.
Asset manager, Ninety One (+13% MoM), was another standout performer on the local bourse in June. The company announced its FY25 results for the year ended March 2025 with headline earnings per share (HEPS) down 7% YoY. Despite the tough operating environment, the company was able to grow assets under management (AUM) by 4% YoY as currency and market movements offset investor outflows, and CEO Hendrik du Toit said that the asset manager had regained positive asset flow momentum.
The country’s latest inflation data showed that the increase in core prices (+3% YoY) remained comfortably under control at the bottom of the SA Reserve Bank’s target range, slightly below economists’ expectations. The local currency (+1.6% MoM vs the US dollar) was a beneficiary of a weaker US currency, with the greenback suffering its worst start to the year against developed market peers in over 50 years (US Dollar Index -10.7% YTD). The government’s 10-year borrowing cost ended June in single figures (9.96% p.a.), falling below 10% p.a. for the first time since early 2022, following global yields lower in an otherwise uneventful month for global rates.
