South African markets end 2025 strongly as commodities and confidence drive returns

South African equities ended 2025 strongly, with the FTSE/JSE All Share Index rising 4.6% in December and 42.4% for the year, placing the market among the top global performers. Full-year gains were led by the Resources sector, supported by elevated commodity prices, while December performance was driven by Financials, which outperformed during the month. Bonds posted strong gains, listed property ended the year higher, and the rand strengthened sharply against the US dollar. Inflation eased toward the SARB’s preferred level, although food prices remained a pressure point. Manufacturing conditions stayed weak, with the PMI in contraction territory despite some improvement in business activity.

Highlights in this article reveal:

• South African equities closed 2025 among the best-performing global markets, led by strong resource sector gains. 
• Bonds and the rand delivered robust returns, supported by easing inflation and favourable commodity dynamics. 
• Manufacturing activity remained under pressure, with the PMI signalling continued contraction despite improving business activity. 

South African equities ended 2025 on a strong note, extending gains in December. The FTSE/JSE All Share Index rose 4.6% for the month and 42.4% year-to-date, while the Capped SWIX Index advanced 4.6% in December and 42.6% for the year, positioning South Africa among the best-performing global equity markets in 2025.

Performance was driven primarily by resource stocks, which surged 5.7% in December and 126.0% year-to-date, supported by elevated commodity prices. 

Financials also delivered robust returns, rising 7.7% for the month and 27.1% year-to-date, while Industrials recorded a more modest gain of 1.9% in December and 18.1% over the year.

Market capitalisation trends reflected broad participation. Large-cap stocks, as measured by the All Share 40 Index, advanced 4.7% in December, while mid-cap shares rose 4.5%, and small caps gained 2.4%. This breadth of performance reflected strong investor appetite across the market segments, underpinned by favourable commodity dynamics and improving sentiment toward domestic assets.

December’s JSE leaders included Tharisa Plc (+24.7%) and Aspen Pharmacare (+24.7%), boosted by strong results and corporate actions, while Impala Platinum (+22.2%) gained on higher platinum prices. Other notable risers were Thungela Resources (+18.3%), Nutun (+18.0%), and Telkom (+17.6%). On the downside, Mr Price (-16.7%) declined amid acquisition concerns, with Alexander Forbes (-8.7%), Spar (-8.2%), and property counters like Fortress (-7.2%) also underperformed.

Fixed income markets delivered positive returns during the month.

The All Bond Index (ALBI) gained 2.8% for the month and 24.2% year-to-date, while inflation-linked bonds (CILI) rose 2.8% in December and 15.4% for the year, reflecting stable inflation expectations and supportive fiscal signals. Cash instruments, as measured by the SteFI Composite Index, returned 0.6% for December. Listed property edged higher, with the All Property Index (ALPI) up 0.1% for the month and 30.6% for the year, supported by lower interest rate expectations and improved sentiment toward income-generating assets.

The rand strengthened notably in December, appreciating 3.3% against the US dollar to close at R16.57/USD, and gained 13.8% over 2025. 

Currency strength was supported by robust commodity performance and favourable domestic developments, reinforcing investor confidence in South African assets.

Inflation data showed headline consumer inflation easing to 3.5% year-on-year in November from 3.6% in October, while core inflation edged up to 3.2% year-on-year, remaining close to the South African Reserve Bank’s 3% target. Food inflation accelerated to 4.4%, driven by meat prices rising to 12.2% year-on-year, while transport inflation moderated to 0.7% on lower fuel costs.

Producer inflation remained steady at 2.9% year-on-year, with meat prices continuing to exert upward pressure.

The Absa Purchasing Managers’ Index (PMI) declined further to 40.5 points in December, signalling ongoing contraction in the manufacturing sector. This weaker headline reading was largely driven by sharp declines in inventories (36.1) and employment (39.9). However, the business activity sub-index improved notably, rising by 9.4 points to 46.1, indicating a pickup in production momentum despite overall conditions remaining below the neutral 50-point level. 

About the South African Market Commentary 

The retrospective RisCura South African monthly Market Commentary, offers investors insights across key segments including the local markets and economic trends to gain clarity on economic indicators, asset performance, and market dynamics. Geared for informed investors, our insight into emerging markets empowers strategic decision-making in the dynamic South African market.  

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