September 2025 Update
Making The News
- The Fed Cut
Global markets entered September with optimism and had a euphoric end to the month (despite the US Government shutdown), with developed markets enjoying a strong close to the quarter (MSCI World Index +3.2% MoM, +7.3% QoQ, +17.4% YTD) following the US FEDs first rate cut in a year. Big Tech once again led gains, with Nvidia’s partnership with OpenAI reigniting AI enthusiasm, highlighted by the performance of Tesla (+33% MoM), Alphabet (+14% MoM), Apple (+10% MoM), and Oracle (+24% MoM). Despite the S&P 500’s 15% YTD advance, returns remain concentrated, with sectors like Healthcare (+2.6% YTD), Consumer Staples (+3.9% YTD), and Consumer Discretionary (+5.3% YTD) lagging.
- US Government Shutdown
Emerging market (EM) equities outperformed developed markets in the third quarter (+10.6%), with the MSCI EM Index surpassing the MSCI World in US dollar terms. The rally was led by index heavyweights China, Taiwan, and Korea, supported following progress in US–China trade discussions, the Fed’s September rate cut, and sustained investor enthusiasm for AI-related stocks. Egypt, Peru, China, and South Africa were the standout performers, each delivering returns above +20% in US dollar terms over the quarter. EM equities also advanced strongly in September (MSCI EM Index +7.2% MoM), extending 2025 year-to-date gains to +27.5%, well ahead of developed markets (+17.4% YTD).
- SA’s Strongest Rally of the Year
September was the strongest month of 2025 for South African equities, with the FTSE/JSE Capped SWIX Index advancing +6.5% month-on-month (MoM). This capped the market’s best quarter in more than five years (+12.8% QoQ) and lifted year-to-date gains to +31%. Once again, precious metal miners led the charge — platinum and gold producers rose +46% and +27% MoM, respectively, contributing nearly all of the JSE’s monthly performance. Notably, this strength came despite the expiration of the African Growth and Opportunity Act (AGOA), which ended decades of U.S. trade preferences, reintroducing tariff and competitive pressures for African exporters.
- SARB Policy Shifts
Consumer sentiment weakened in Q3, according to the latest BER survey, as views on South Africa’s economic outlook and household finances deteriorated, while willingness to buy durable goods remained flat at already low levels. Spending data still point to resilience, but momentum is likely to ease as CPI inflation edges higher, the temporary boost from two-pot retirement withdrawals fades, and labour market pressures intensify. Business confidence was mixed. Retail sentiment fell to its lowest level since 2023 as sales volumes softened, despite July data showing surprising strength. In services, overall confidence was steady, masking gains in hospitality and business services but weakness in transport and real estate.
