Foreign investors dump South African stocks 

Foreign investors have continued to dump JSE-listed shares in 2025, with non-residents selling R165 billion worth of stocks in the first eight months of 2025. 

This is significantly more than the R93 billion sold in the same period in 2024, with investors increasingly looking for safety amid elevated global uncertainty and volatility. 

However, despite this, the JSE has had one of its best years on record, with it surging by around 40% in dollar terms and far outpacing more developed global peers. 

This is also despite a stagnant local economy, with an increasing share of the revenue generated by large companies on the JSE coming from outside of South Africa. 

The Reserve Bank revealed the net sales of local equities by foreign investors in its latest Quarterly Bulletin, emphasising that South Africa’s lacklustre economic growth is beginning to impact the depth of its capital markets. 

Non-residents’ cumulative net sales of domestic-listed shares of R165 billion in the first eight months of 2025 exceeded the net sales of R93 billion in the same period of 2024. 

The persistent sell-off by non-residents in the domestic secondary share market reflected weak domestic economic growth and recurring disputes within the GNU. 

This was coupled with continued geopolitical risks and investor concerns over the 30% tariff imposed on South African exports to the United States.

Despite these net sales from foreign investors, the JSE itself has had a blockbuster year in terms of trading activity and investment. 

The combined value of turnover in the secondary share market of the four South African stock exchanges of R4.6 trillion in the first eight months of 2025 was 30% higher compared with the same period of 2024.  

Consistent with the increase in share prices, the combined market capitalisation of shares listed on all four exchanges increased steadily over this period, to R22.6 trillion in August 2025.

South African stocks are soaring

The domestic share market outperformed its global counterparts in the first half of 2025, as the All Share, on balance, increased by nearly 40% in US dollar terms. 

This occurred as emerging market shares outperformed the developed markets, with the MSCI Emerging Markets Index posting a 13.7% increase compared with the 8.6% gain in the MSCI World Index over this period. 

The increase in the ASI was buoyed by, among other factors, higher international share prices and positive sentiment after the passing of the revised 2025 National Budget. 

Domestic share prices continued their strong momentum in the ensuing months, despite the 30% tariff imposed on South African exports by the US. 

On 23 July 2025, the ALSI, in rand terms, surpassed the 100,000 index point level for the first time, recording 100,180 index points. 

The JSE’s strong performance has largely been due to a record gold price and surging platinum prices. 

This has resulted in miners on the JSE soaring so far in 2025 as investors expect a substantial pickup in profits from these companies as metals prices rise. 

While South Africa is a relatively small producer of gold, the JSE is still home to some of the world’s largest miners of the precious metal. 

This has seen the resources index skyrocket and bolster the performance of the Top 40 index and the All Share. 

The strong performance of the JSE is not an indication of the strength of the local economy as financial markets do not reflect the full picture. 

It is only the largest companies that list on the JSE, and sometimes the strong get stronger in tough economic conditions as weaker players fall away. 

Moreover, a few JSE-listed companies rely only on the South African business climate, with many of the largest companies having significant operations outside of the country.

Of the top 10 companies by market value on the JSE, only Capitec and FirstRand truly count as local companies when considering where most of their revenue is generated. 

The biggest property company on the JSE by market value, NEPI Rockcastle, runs an Eastern European real estate portfolio.

The gains in local equities this year have been on the back of strong earnings growth, and the bottom-up analyst consensus view is that this continues next year. 

It means that despite the rally, the local market still trades on an attractive forward price-to-earnings ratio of around 10 times, a starting point that has historically delivered solid long-term real returns.

The strong performance of the JSE compared to its international peers can be seen in the graphs below.