Global equities closed 2025 on a strong note, with developed markets gaining +0.8% in December and +21.1% for the year. However, market leadership shifted away from the US toward Europe and emerging markets. European equities surged into year-end, with the Euro Stoxx 50 rising +3.4% in December and outperforming US markets by +21% in USD terms over 2025, the largest performance gap since the index’s inception. US equities lagged as investor concerns mounted around the scale and potential returns of AI infrastructure spending, weighing on mega-cap technology despite the Nasdaq still finishing the year up +21%. Emerging markets outperformed developed peers both in December and across 2025 for the first time since 2020, driven largely by strong gains in AI-linked semiconductor stocks in Taiwan and Korea, alongside strong gains in Chinese tech. The US Federal Reserve delivered a third consecutive 25bp rate cut amid internal dissent, while a sharply weaker US dollar over the year provided an additional tailwind for European and emerging market assets.

South African equities capped off a stellar year, with the JSE recording a tenth consecutive monthly gain in December, supported by a powerful rally in precious metals. The FTSE/JSE All Share Index rose +4.6% over the month, taking its 2025 gain to an exceptional +42.4%, the strongest annual performance in nearly two decades. Higher gold and platinum prices were the primary drivers, reinforced by improving sentiment toward SA Inc. and a materially stronger rand, which appreciated +12.2% over the year to around R16.56/US$1. Resource shares continued to lead the market (Resi-10 +5.6% MoM), followed by robust gains in financials, while industrials delivered more modest advances. Listed property lagged in December but still closed the year with a solid +30.6% gain. On the macro front, inflation eased further in November and South Africa recorded its largest monthly trade surplus of 2025, providing an encouraging backdrop as the year came to a close