SA equities rise as inflation edges higher and the SARB cuts rates

South African equities extended their positive momentum in November, with the FTSE/JSE All Share Index rising 1.7% and the Capped SWIX Index gaining 2.3%. Resources drove performance, surging 9.6% as precious metals and mining stocks benefited from higher commodity prices. Large-, mid-, and small-cap stocks all advanced, indicating broad-based market support. Fixed income also delivered strong returns, while listed property rebounded on lower interest rate expectations. Inflation increased to 3.6% year-on-year, driven mainly by fuel costs, although core inflation eased slightly. The SARB cut the repo rate to 6.75%, aligning policy with its new 3% inflation target and supporting investor sentiment.

Highlights in this article reveal:

• South African equities advanced in November, led by a strong rebound in resource stocks. 
• Inflation rose to 3.6% year-on-year, while the SARB cut the repo rate to 6.75% in line with its 3% target. 
• Bonds and listed property delivered robust gains, supported by improved fiscal sentiment and lower interest rate expectations. 

South African equities extended their winning streak in November, with the FTSE/JSE All Share Index up 1.7% and the Capped SWIX Index gaining 2.3%. Year-to-date, the All Share Index has risen 36.2%, while the Capped SWIX has advanced 36.4%.

Performance was driven by resource counters, which surged 9.6% in November on the back of higher commodity prices. 

Precious metals and mining stocks were particularly strong, with the sector up 13.0% for the month, reflecting gains in gold and platinum prices of 5.9% and 6.1%, respectively. In contrast, Industrials declined 4.8%, weighed down by weakness in technology and consumer-related shares, while Financials edged up 1.8%.

Market capitalisation trends were mixed. 

Large-cap stocks, as measured by the All Share 40 Index, rose 1.4% for November, while mid-cap shares gained 4.8% and small caps advanced 4.7%, indicating broader market participation beyond the top tier.

Notable stock moves included Sibanye Stillwater, which surged 20.6% for the month supported by strong third-quarter earnings and stable operational performance. AngloGold Ashanti gained 20.3% on robust production and improved cash flow. Other top performers included Pan African Resources (+17.9%), DRDGold (+15.9%), and Impala Platinum (+15.0%), all benefiting from elevated precious metal prices. Conversely, technology-heavyweights Naspers and Prosus fell 12.3% and 11.2%, respectively, as global sentiment toward AI and tech counters deteriorated. Montauk Renewables was the weakest performer, down 23.7%, reflecting ongoing challenges in the renewable energy sector.

Fixed income markets delivered strong returns in November. 

The All Bond Index (ALBI) gained 3.4%, while inflation-linked bonds rose 3.7%, supported by declining yields and improved fiscal sentiment following the Medium Term Budget Policy Statement. Short-term instruments, as measured by the SteFI Index, returned 0.5%. Listed property rebounded sharply, with the All Property Index (ALPI) up 7.8% for the month, aided by lower interest rate expectations and positive sentiment toward income-generating assets. The rand appreciated 1.3% against the US dollar, closing at R17.13/USD, supported by favourable domestic developments and expectations of further monetary easing.  

Commodity-linked strength and a constructive fiscal backdrop contributed to improved investor confidence.

Headline consumer inflation increased to 3.6% year-on-year in October, up from 3.4% in September and reaching the highest level in over a year. The rise was primarily driven by higher fuel costs, which lifted transport inflation to 1.5%. Housing and utilities remained elevated at 4.5% due to ongoing electricity and water tariff pressures. Food and non-alcoholic beverages inflation eased to 3.9%, supported by softer vegetable prices, while durable goods inflation continued to decline. Core inflation edged down slightly to 3.1%, indicating contained underlying price pressures. Producer inflation also accelerated to 2.9% year-on-year, reflecting increases in food and petroleum-related categories.

These developments occurred alongside fiscal measures outlined in the Medium Term Budget Policy Statement, which reaffirmed the new 3% inflation target as a key anchor for price stability.

The South African Reserve Bank’s Monetary Policy Committee unanimously voted to cut the repo rate by 25 basis points to 6.75% on 20 November 2025, bringing the prime lending rate to 10.25%. The decision reflected confidence in the disinflation trajectory and alignment with the newly adopted 3% inflation target, supported by favourable rand and oil price dynamics. The SARB assessed inflation risks as balanced and revised its GDP growth forecast for 2025 higher to 1.3%, while signalling that further rate cuts may follow, albeit not at every meeting. This shift marked a move toward a less restrictive policy stance aimed at supporting growth without undermining price stability. 

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.  

Subscribe to the South African market commentary by RisCura to understand the economic indicators and factors that affect the economy.