The fourth quarter of 2025 has highlighted a complex but constructive backdrop for both local and global markets. Key sectors on the JSE have shown divergent performance as investors position themselves for the year ahead.
Precious metals, particularly gold miners and platinum group metals, experienced ongoing profit-taking, while the banking sector recorded strong buying activity. Listed property counters also benefitted from increased investment inflows.
Retail performance was mixed, with Pepkor, Boxer and Pick n Pay outperforming, contrasted by weaker trends in Truworths, Woolworths, Mr Price, and Foschini.
Defensive stocks such as British American Tobacco and Shoprite saw renewed demand in anticipation of heightened market volatility.
22 Capital confirmed an overweight position in both banks and property stocks. The firm recently exited Aspen due to concerns over share performance and management effectiveness, reallocating capital to British American Tobacco.
Additional opportunities are being evaluated in the gold sector, particularly large-cap stocks AngloGold Ashanti and Gold Fields. Interest in global energy shares continues to grow, drawing attention to Sasol and Exxaro.
On the macroeconomic front, geopolitical dynamics remain driven by US President Donald Trump’s tariff-centred foreign policy, pressuring global trade relationships.
Europe has increased defence spending in response to reduced US support for the Russia-Ukraine conflict, adding momentum to certain areas of its economy.
While US-China trade discussions have shown modest progress, China continues to grapple with slower growth and deflationary risks.
Interest rates are expected to stabilise by the third quarter of 2026, while the US dollar is likely to remain range-bound until late next year. Although valuation concerns persist in US large-cap AI stocks, broader global equities remain reasonably priced, with emerging markets poised to benefit as interest rates ease.
A notable development is S&P Global Ratings’ upgrade of SA’s sovereign rating from BB- to BB, with a positive outlook — the country’s first upgrade in two decades. This improvement is anticipated to support foreign investment flows.
SA now stands at an inflection point: fiscal consolidation, declining inflation, debt stabilisation, and ongoing structural reforms have collectively strengthened economic credibility and positioned the country for a gradual recovery.
This article was sponsored by Edge Financial Group, an independent financial services company specialising in individual and group portfolio management, retirement planning, insurance solutions, and medical aid advice.