South African stocks show no signs of slowing their record 12-month rally, fueled by soaring metals prices and a stronger rand, according to Bank of America Corp.
The FTSE/JSE Africa All Share Index hit a fresh record high on Monday, buoyed by gains in gold and silver following US and Israeli attacks on Iran. While the index pared some gains later in the session, it still outperformed the broader emerging markets benchmark, Bloomberg reported.
The market’s surge reflects a rare alignment of supportive domestic and global forces. Elevated metals prices and expectations of a weaker US dollar have created a “sweet spot,” according to BofA South Africa strategist John Morris. “You don’t often see this combination, and we still have runway,” he said.
Over the past year, the FTSE/JSE All Share Index has jumped 44%, marking its longest monthly winning streak since records began in 1995. February alone saw a 7% gain, the biggest monthly advance in more than two years, led by metals and mining stocks.
Gold has soared 86% over the past year, while platinum has surged 146%, underpinning optimism for the next 12 to 15 months. Hostilities in the Middle East have not altered the positive outlook.
The South African rand opened 2026 at its strongest level since 2022, supported by positive domestic trends. Having gained about 15% against the dollar over the past year, it is expected to strengthen further, potentially lowering bond yields and benefiting banks and other domestic sectors.
High commodity prices and a firmer rand support not only miners but also financial and industrial shares, which may catch up with the resources sector. Morris noted that South Africa’s recent budget reinforces the case for investing in local assets.
While economic growth remains modest and reforms incremental, easing inflation could give the South African Reserve Bank room to cut interest rates, further supporting the cyclical upswing.
-Business Insider Africa