In March 2025, global financial markets faced significant volatility, primarily due to escalating trade tensions and anticipated tariff implementations by the United States. The uncertainty intensified following President Donald Trump’s announcement of forthcoming reciprocal tariffs. South African Equities showed resilience with only listed property posting a loss for March. Chinese Indexes saw positive returns with the MSCI China index ending the month up 1.97%.
LOCAL MARKETS
Exhibit 1 | Local Performance (ZAR) for March 2025
Source: Factset. Data as at 31 March 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
South Africa
Economy
In March the South African Rand strengthened by just over 1% against the US Dollar trading at R18.30. This was largely due to the surge in the gold price over the last month as investors sought safe-haven assets as global trade tensions continued.
The South African Reserve Bank revised the country’s growth forecast down 1.7% from 1.8% citing weaker demand and ongoing supply challenges. The Democratic Alliance (DA) is still opposing the national budget, this has raised concerns surrounding the strength of the coalition government and potential delays in implementing fiscal policies. Instead of a 2% increase in the VAT rate this year, as proposed by the Budget withdrawn on 19 February, the government has proposed to increase the rate of VAT by 0.5% each year over two fiscal years. This will result in the VAT rate reaching 16% in 2026/27.
Equity Markets
The JSE All Share Index (ALSI) ended the month up 4.06%, with the JSE Capped SWIX also increasing by 3.6%.
Sector performance:
The Resource Index (RESI10), which tracks the 10 largest mining and resources companies on the JSE, increased sharply (20.88%) largely due to the rising gold prices and increasing demand for gold as investors bought into the safe-haven asset.
The Industrial Index (Indi25) decreased by 0.22% for March while the Financial Index (FINI15) posted a modest gain of 0.18%.
Top performers for the month:
- Sibanye Stillwater: 47.9%
- Harmony Gold Mining Company: 47.86%
- Impala Platinum Holdings: 42.88%
Worst performers for the month:
- Compagnie Financiere Richemont SA: -15.13%
- Mr Price Group: -9.47%
- Glencore PLC: -8.72%
Bond Market:
The South African bond market in March 2025 reflected a balance between investor caution amid global uncertainties and the search for stable returns. The South African 10-year borrowing cost rose to 10.61% per year. This is largely due to economic uncertainty around the world which contributed to higher borrowing costs for the government. The All-Bond Index (ALBI) increased by 0.2%.
GLOBAL MARKET
Exhibit 2 | Global performance (base currency) for March 2025
Source: Factset. Data as at 31 March 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
United States
U.S. equities experienced declines in the first quarter of the year, realising its worst quarter in 23 years. The S&P 500 was down 5.63% in March, closing off the S&P500’s worst quarter since 2022. Investor apprehension regarding the impending tariffs contributed to the fears of a potential recession.
Goldman Sachs revised its economic projections, increasing the probability of a U.S. recession to 35%. The Federal Reserve kept rates at their current level during the March meeting. Consumer sentiment continued its downward trajectory with the Consumer Confidence Index declining for its fourth consecutive month. The Personal Consumption Expenditure (PCE) price index also remained above the 2% target set by the Federal Reserve. The NASDAQ 100 declined by 7.61% and the Dow Jones Industrial Average was down 4.06% as investors still face economic uncertainty.
United Kingdom
The FTSE 100 index experienced volatility throughout March ending the month down 2.04%. This is largely due to global trade tensions and other domestic economic factors. The UK labour market presented mixed signals as citizens continue to struggle with rising living costs. Living costs increased further for UK households in April with water and energy prices becoming more expensive. The Office for Budget Responsibility (OBR) revised the UK’s GDP growth forecast for 2025 down to 1%, citing weaker productivity and business sentiment.
Europe:
European equity markets experienced its first monthly decline of the year with the Euro Stoxx index down 3.59%. The German DAX declined by 1.72% due to investor concern regarding the potential impact trade tariffs could have on Europe’s largest economy. The European Central Bank (ECB) reduced interest rates by 25 basis points. This marked its sixth cut since June 2024.
Asia
Asian stock markets had mixed results, with China’s Hang Seng index gaining 0.8%, the SSE Composite Index up 0.45% and the CSI 300 index declined 0.07%. This was largely due to increased global interest in Chinese tech as Western Markets turned volatile. Japan’s Nikkei 300 slumped further with the index declining 4.08% in March, following further concerns regarding U.S. tariffs.
Fixed income and currencies
Bond yields and currency exchange rates fluctuated during March. The South African rand strengthened against the dollar over the month to end at 18.38/USD. The yield on the 10-year Treasury note remained relatively stable throughout March fluctuating between 4.16% and 4.34%. The 10-year German bond yield surged to almost 3% by the end of March, driven by increased government borrowing to fund expanded infrastructure and defence spending. France and the UK also experienced upward pressure due to heightened borrowing needs.
Commodities
March was a positive month for the resource sector allowing for a recovery from the sharp declines experienced in February. The RESI 10 surged by 20.88% as increasing demand for resources assisted with the sector’s recovery. Gold prices increased to an all-time high of over $3 100 per ounce. Crude Oil prices increased amid concerns over potential supply disruption between Iran and Russia.
Investment themes and key considerations
With the implementation of extensive tariffs by President Donald Trump, the risk of trade disruptions remains and could see the disruption of certain supply chains (especially in Canada, Mexico and China). Should South Africa’s budget be approved, the first VAT increase will take effect on 1 May with an increase of 0.5% (from 15% to 15.5% with a further 0.5% increase planned for April 2026). Bonds remain an attractive option for investors looking for stable returns in uncertain times.
Outlook
As we move into April some market-moving events include the ongoing negotiations regarding the 2025 budget as the DA has expressed opposition that could influence the stability of the Government of National Unity (GNU). The Reserve Bank also stated that future repo rate decisions will be data-driven with a neutral rate projection around 7.25%.
On the global front, there are still escalating trade tensions particularly involving the U.S. South Africa’s trade relationships and market performance might be affected by these developments.
In conclusion
Despite volatility, markets remain resilient, with opportunities in fixed income and selective equities. As we navigate 2025, staying diversified and proactive in risk management will be key for investors.
