September was the year’s best month for South African (SA) equity markets (FTSE/JSE Capped SWIX Index +6.5% MoM), ending its strongest quarter in over 5 years (FTSE/JSE Capped SWIX Index +12.8% QoQ) and pushing the local bourse to a 31% YTD gain. In what has become a familiar theme for the JSE in 2025, precious metal miners were the major drivers of performance. Platinum miners (+46% MoM) and gold miners (+27% MoM) were responsible for all of the JSE performance in September, while investment conglomerates Naspers and Prosus (+8% MoM in aggregate) were the other key sources of positive returns, offsetting the collective drag from the remaining counters. Naspers and Prosus have been beneficiaries of strong momentum in Chinese equities, with their largest underlying investment, Chinese tech conglomerate Tencent, up 11% MoM and 60% YTD. A 12% MoM rally in the gold price (+47% YTD) and a 15% MoM rally in the platinum price (+74% YTD) were the major drivers of the precious metal miners’ performance, and that cohort is now responsible for two-thirds of the JSE’s gains in 2025.
One of the standout performers amongst the JSE-listed counters geared to the domestic economy (so-called SA Inc. shares) was Shoprite (+6% MoM), which reported strong FY25 results with sales +9% YoY, margins +0.4%YoY (to 5.8%) and earnings up 16% YoY. FirstRand (+4% MoM) was another rare example of a domestically focussed company to produce positive returns for investors in September. FirstRand’s FY25 results included a R3bn provision related to its UK motor business, but despite this, the company was able to deliver 10% YoY earnings growth in a challenging economic environment.
The day after the US central bank cut rates by 0.25%, the SA Reserve Bank (SARB) members voted to keep SA rates on hold, leaving the country’s prime lending rate at 10.5% p.a. Two of the SARB committee’s six members voted in favour of a cut, with the majority preferring to keep rates on hold ahead of a planned move to a stricter inflation target of 3% p.a. The South African government’s 10-year borrowing rate fell 0.44% during September as it ended the month at 9.2% p.a., its lowest level in over four years and the lowest premium relative to the US government’s 10-year borrowing rate since 2013.
The rand strengthened against the US dollar in September (+2.2% MoM), making it one of the best-performing major currencies for the month, as the greenback stabilised after experiencing significant weakness in 1H25. The September move left the rand 9% strong against the US dollar YTD.
