Global and local markets extended their positive run in August, supported by resilient corporate earnings, firm commodity prices, and growing expectations of monetary easing in the United States. The MSCI World Index gained 2.6% for the month, while South Africa’s equity market continued its strong momentum, advancing for the sixth consecutive month, with gold miners once again driving the performance. Although political risks in Europe and renewed trade tensions created some volatility, sentiment remained constructive as investors focused on interest rate policy and the global growth outlook.
LOCAL MARKETS
Exhibit 1 | Local Performance (ZAR) for August 2025
Source: Factset. Data as at 31 August 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
South Africa
Economy
South Africa’s economic backdrop was mixed in August. Consumer inflation rose to 3.5% year-on-year in July, up from 3% in June and the highest level in almost a year. The increase was primarily driven by higher food prices, especially a 10.5% jump in beef due to a foot-and-mouth outbreak, along with municipal tariff hikes and higher fuel costs. Core inflation (which excludes volatile items like food and energy) also edged higher to 3%.
Equity Market
South African equities had another strong month, with the FTSE/JSE All Share Index and the Capped SWIX Index both advancing 3.5% in August, with both indices now delivering impressive returns of more than 20% so far this year. Gold mining companies were the standout performers, gaining 4.8% in August and 22% year-to-date. They contributed around three-quarters of the JSE’s monthly return. Together with platinum producers, precious metal miners have accounted for more than half of the market’s gains so far in 2025. Industrials rose 1.2%, financials gained 1.1%, and listed property added 2.8%.
Company results also drove notable share price moves. Curro jumped 34% after receiving a R7.2 billion buyout offer from a charitable foundation established by PSG founder Jannie Mouton, with plans to delist and convert the company into a non-profit education provider. Standard Bank rose 6% after reporting strong results, with its African operations delivering nearly 40% of group earnings. In contrast, Nedbank fell 9% after reporting earnings growth of only 2.6% year-on-year. Retailers underperformed, with Truworths down 15% and Foschini losing 12% on disappointing results and concerns about the execution of their turnaround strategies.
Best performers:
- Goldfields: 31.51%
- Sasol: 27.21%
- AngloGold Ashanti: 21.06%
- BHP Group: 9.23%
- Old Mutual Ltd: 8.85%
Worst performers:
- Sibanye Stillwater Ltd: -13.11%
- Aspen: -9.74%
- Nedbank: -8.91%
- Pepkor Holdings Ltd: – 7.27%
- Implats: – 7.24%
Bond Market
South African bonds were steady in August after strong gains in July, adding 0.7% for the month. Borrowing costs continued to ease, with the 10-year government bond yield falling to 9.6%, its lowest level in seven months, supported by lower global yields. The rand strengthened 3.2% against the US dollar in August and is now up 6.7% this year, ending the month at R17.69/USD. The firmer rand was underpinned by strong commodity prices and renewed investor appetite for emerging markets.
GLOBAL MARKETS
Global equities advanced in August, supported by robust corporate earnings, strength in healthcare stocks, and rising expectations of a US Federal Reserve interest rate cut in September. The MSCI World Index gained 2.6% for the month and is now up 16% year-to-date. The MSCI Emerging Markets Index rose 1.5% in August, extending its year-to-date gain to almost 18%.
Exhibit 2 | Global Performance (base currency) August 2025
Source: Factset. Data as at 31 August 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
United States
US equities continued to climb in August, with major indices seeing strong gains: the S&P 500 gained 2.0%, the Dow Jones rose 3.4%, and the Nasdaq 100 advanced 2.2%. Small-cap stocks rebounded strongly, with the Russell 2000 up 7%, outperforming the S&P 500 by more than 5%. Healthcare was one of the strongest sectors, gaining 5.4%, led by United Healthcare which surged 24% after a large share purchase by Berkshire Hathaway was disclosed.
Labour market data showed weakness, with downward revisions leaving average monthly job growth at just 35,000 over the past three months, well below the 200,000 jobs typically associated with a healthy labour market. This pushed the US 10-year Treasury yield as low as 4.2% during the month. Inflation pressures persisted, with July core CPI rising 3.1% year-on-year and core PCE at 2.9%.
Looking ahead, expectations for a September interest rate cut by the Federal Reserve strengthened after Chairman Jerome Powell acknowledged the weakening labour market. He suggested that rates might need to be lowered to support economic stability, following eight consecutive months of no change. However, ongoing trade risks remain a concern, highlighted by the US’s new 50% tariff on Indian imports, which unsettled Asian markets.
Europe
European markets ended the month weaker. Germany’s DAX fell 0.7% and France’s CAC slipped 0.9%, with political uncertainty in France ahead of a no-confidence vote on government spending plans and trade policy concerns weighing on sentiment. Eurozone inflation was steady, with headline inflation at 2% and core inflation at 2.3%, both unchanged from June and aligned with the European Central Bank’s target.
United Kingdom
The UK’s FTSE 100 managed a 1.2% gain in August, reaching record highs mid-month before retreating on concerns over a potential tax on bank profits. Inflation surprised to the upside once again, with headline inflation rising to 3.8%, the highest since January 2024, while core inflation also stood at 3.8%.
Asia
China led gains in Asia. The Shanghai Composite advanced 8.1% and Hong Kong’s Hang Seng rose 1.3% on optimism around government stimulus and investment in the chip sector. Japan’s Nikkei climbed 4.1%, supported by softer inflation, although weak retail sales and industrial activity limited further upside.
Emerging Markets
Emerging markets underperformed developed peers but still delivered gains. The MSCI Emerging Markets Index rose 1.5% in August, marking its eighth consecutive positive month. Chinese shares remain the key driver, with Hong Kong-listed companies up 26% this year.
Commodities and Currencies
Gold rose 4.8% in August, taking its year-to-date gain to 31.4%. Platinum added 6.1%, while palladium and rhodium fell 7.9% and 2.1% respectively. Oil prices retreated, with Brent crude down 6.1% to around US$68 per barrel after spiking in July. The US dollar weakened again, with the Dollar Index falling 2.2% in August and now 10% lower this year. The softer dollar supported emerging market currencies, including the rand.
Outlook
South African markets remain underpinned by firm commodity prices and a stronger rand. Precious metal miners continue to dominate performance, though this concentration increases risk if commodity prices reverse. Domestic challenges such as logistics bottlenecks and weak consumer demand also remain hurdles to broader growth.
Globally, developed markets continue to grind higher, supported by strong corporate earnings and selective sector gains. Emerging markets are also holding up, though performance still trails developed peers. With upcoming centralbank decisions, European political uncertainty, and the scale of Chinese stimulus all in focus, diversification and prudent portfolio construction remain essential.
