July marked a pivotal month for financial markets, both domestically and globally. Locally, the FTSE/JSE All Share Index broke through the 100,000-point milestone for the first time, driven by robust commodity prices, resilient corporate earnings, and a supportive interest rate cut by the South African Reserve Bank. Globally, investor sentiment was supported by easing inflation pressures, a solid United States earnings season, and more accommodative monetary signals from major central banks. Equity markets across developed and emerging regions posted healthy gains. Together, these factors created a broad risk-on environment, lifting both local and global asset classes.
LOCAL MARKETS
Exhibit 1 | Local Performance (ZAR) for July 2025
Source: Factset. Data as at 31 July 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 macroeconomic landscape showed positive developments in July. Headline inflation rose slightly to 3% year-on-year in June, up from 2.8% in May, but remains well within the SARB’s 3% – 6% target band. In a dovish policy shift, the SARB cut interest rates by 25 basis points, lowering the repo rate to 7%. At the announcement of the cut, it was also announced that the new target for inflation will be set at 3%.
On the fiscal front, Treasury resolved its mid-year budget deadlock and announced its intention to raise US$500 million in foreign funding, partially through ESG-linked instruments, to fund the 2025/26 budget deficit, which is expected at 4.8% of GDP. While debt remains elevated at around 77.4% of GDP, this funding effort is a step toward fiscal consolidation. Trade developments were also in focus, as South Africa entered urgent negotiations to avoid a proposed 30% tariff on exports to the United States, with talks focusing on Liquefied Natural Gas import commitments and foreign investment incentives.
Equity Markets
July was a historic month for South African equities as the FTSE/JSE All Share Index (ALSI) rose 2.3%, closing above the 100,000-point milestone. This lifted the ALSI’s year-to-date performance to 19.4%, driven by strong earnings, rising commodity prices, and investor optimism. The Capped SWIX Index gained 2.2% in July and is up 18.7% year-to-date, reflecting broad-based sector participation.
Performance was particularly strong in the Resources sector, which rose 5.1% in July, benefiting from a sharp rally in platinum and gold prices. Industrials posted a moderate gain of 1.3%, supported by global earnings from multinational firms, while Financials rose by 1.4%. The Listed Property sector rose by 4.8% in July, supported by rate cuts.
Best performers:
- Sasol Limited: 18.99%
- Sibanye Stillwater Limited: 18.94%
- British American Tobacco: 14.72%
- Northam Platinum Holdings Limited: 9.43%
- MTN Group Limited: 8.88%
Worst performers:
- Mondi plc: -14.76%
- Anheuser-Busch InBev SA/NV: -12.39%
- Compagnie Financière Richemont SA: -10.58%
- Reinet Investments S.C.A.: – 8.62%
- Shoprite Holdings Limited: – 4.13%
Bond Market:
In July, South African bond markets rallied as yields declined across the curve, driven by the South African Reserve Bank’s 25-basis-point rate cut and a dovish shift in its inflation targeting strategy toward 3%. The 10-year government bond yield fell from around 9.9% to 9.6%, reflecting improved investor confidence and increased demand for nominal bonds, while the South African rand weakened by approximately 2.8% against the US dollar, ending the month at R18.21/USD
GLOBAL MARKETS
Exhibit 2 | Global Performance (base currency) July 2025
Source: Factset. Data as at 31 July 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
United States
US markets posted solid gains for the month of July, supported by a strong second-quarter earnings season, easing inflation, and optimism around a potential soft landing. The S&P 500 rose 2.2%, bringing its year-to-date (YTD) return to 8.6%. The tech-heavy Nasdaq 100 outperformed with a 2.4% gain in July, driven by strength in AI and semiconductor-related companies.
Economic data showed renewed momentum. Second-quarter GDP rebounded to 3.0% (annualised), following a mild contraction in the first quarter. However, inflation ticked slightly higher, headline CPI rose to 2.7% from 2.4% in May, while core CPI climbed to 2.9% year-on-year. The Federal Reserve held rates steady at its July meeting, with Chair Powell stating that current rates are “in the right place”. Markets have since moderated expectations for a September rate cut.
Europe
European equities advanced in July, supported by a stable monetary backdrop and improved liquidity conditions. The Euro Stoxx 50 rose 0.5% for the month, while Germany’s DAX added 0.7%, lifting its year-to-date performance to an impressive 20.9%. France’s CAC Index also gained 1.4%.
Eurozone inflation remained contained, with headline CPI at 2.0% year-on-year and core inflation at 2.3%. President Trump finalised a trade agreement with the European Union that imposed a 15% tariff on most imported goods, alongside EU commitments to invest in the U.S. economy and increase imports of American energy products.
United Kingdom
The FTSE 100 gained 4.3% in July, bringing its year-to-date return to 14.2%. UK equities were supported by strong earnings and a rebound in consumer confidence. Political stability following recent elections has also contributed to the market’s relative resilience.
Asia
Asian markets recorded moderate gains in July. China’s Shanghai Composite Index rose 3.7%, while Hong Kong’s Hang Seng Index climbed 3.1%, bringing its year-to-date return to a robust 23.5%. Investor sentiment improved on the back of infrastructure-led stimulus and easing global trade tensions.
China’s second-quarter GDP came in at 5.2% (year-on-year) – slightly ahead of expectations. However, manufacturing PMI slipped to 49.3, reflecting contraction, while non-manufacturing PMI edged just above 50. Although stimulus measures are filtering through, concerns remain around the property sector and weak domestic demand.
Emerging Markets
Emerging markets rallied in July, driven by renewed appetite for high-yielding assets and strength in commodity-linked economies. The MSCI Emerging Markets Index gained 1.9%, lifting its year-to-date return to 17.9%.
South Africa, Brazil, and India were among the key beneficiaries, with South Africa supported by gains in mining and energy stocks. Improving capital flows and stabilising inflation dynamics created a favourable environment for risk assets across the Emerging Markets.
Commodities and Currencies
Commodities delivered a mixed performance in July, reflecting divergent dynamics across the complex. Brent crude oil gained 7.3% in July, supported by OPEC+ production cuts and constrained supply, closing near US$73.50/bbl. Gold declined by 0.4% as a firmer US dollar weighed on sentiment; however, the yellow metal remains up 25.4% year-to-date. Copper initially rallied on supply concerns and tariff speculation but reversed sharply, ending the month down 2.6% after key US tariffs excluded critical inputs such as ores and cathodes.
In the platinum group metals (PGMs), platinum retraced 5.0% following strong June gains, while palladium rose 8.3% and rhodium surged 32.4%, continuing their impressive year-to-date climbs of 31.4% and 58.5%, respectively.
Outlook
The outlook for South African markets in the coming months is cautiously optimistic. The SARB’s decision to lower interest rates should provide a modest boost to consumer and business sentiment, while contained inflation and strong commodity prices continue to support risk assets. However, domestic structural challenges, including persistent energy constraints, logistics inefficiencies, and policy uncertainty remain significant headwinds.
Globally, the backdrop is mixed. While corporate earnings particularly in the United States have surprised to the upside, slowing momentum in China and Europe, along with elevated geopolitical risks, may limit upside. Investors should continue to monitor key events such as trade negotiations and inflation data for signs of broader shifts.
July’s performance highlights how quickly sentiment can improve when fundamentals align. But as markets reach new highs, the case for maintaining diversified and resilient portfolios remains as important as ever.
