Rand, JSE and SA bonds made solid gains in 2025 in defiance of moribund economy

Judging from the performance of South African financial markets in 2025, it is hard to believe that the economy probably only grew about 1% or so.

The JSE All-share index added 38.5% over the course of 2025 to close the year just shy of 116,000 points and near its record high reached in December of more than 117,000.

The rand, for its part, gained over 12% against the dollar in 2025, ending the year just below 16.60/dlr. And the yield on the benchmark 10-year government bond fell about 70 basis points to 8.21%.

These rallies underscore the disconnect between financial markets and asset classes and the wider South African economy, which is growing at a snail’s pace and remains burdened with an unemployment rate of almost 32% and glaring disparities of income and wealth.

Read more: The GDP disconnect — why South Africa’s 2025 growth didn’t feel like relief

In the JSE’s case, its performance was partly a reflection of a worldwide equities rally in 2025 that saw global stock markets put in double-digit gains for the third consecutive year. The S&P 500, for example, rose 16.5% in 2025.

The JSE’s gains in percentage terms were more than double that thanks in no small part to red-hot precious metals prices, which in turn sparked massive growth in the share prices of producers.

Gold’s dizzying record run to over $4,000 an ounce saw Harmony Gold’s share price more than double in 2025. Gold Fields’ almost tripled while Sibanye-Stillwater’s surged almost fourfold.

Sibanye is also a producer of platinum group metals (PGMs), which staged their own rally in 2025 as supplies tightened. Northam Platinum’s share price more than tripled in 2025, Impala Platinum’s almost doubled while Valterra Platinum’s rose close to 150%.

These rallies look set to be sustained in 2026 as platinum group metals demand is seen rising, and gold’s “safe haven” status will remain in play in the face of global economic uncertainty and mounting geopolitical tensions. And global central bank demand for gold remains robust, especially among emerging markets as they seek to reduce their exposure to the dollar.

Read more: Gold is token reserve in BRICS de-dollarisation push

The rand for its part benefited from soaring precious metals prices as it is regarded as a “commodity currency”. It also gained ground on a dollar weakened by rate cuts and US President Donald Trump’s scatter-shot tariff policies and threats to undermine the independence of the US Federal Reserve.

The performance of the rand in 2026 will hinge on how the dollar fares against other major currencies, the local interest rate cycle – there is a prospect of more rate cuts as inflation cools – as well as commodity prices and domestic economic growth.

The bond rally reflected renewed confidence that South Africa’s levels will finally stabilise in 2025/26 at 77.9% of gross domestic product (GDP). And to top it all off, Eskom’s vast improvements triggered a credit ratings upgrade in November from S&P.

This stellar year for South Africa’s financial markets may not mirror the broader economy and the arduous daily grind of the poor and unemployed, but the disconnect is not total.

A stronger rand helps to contain inflation, which effects everybody by reducing import costs, while the pensions of many South Africans are linked to the JSE. And falling bond yields mean lower borrowing costs – there is an inverse relationship between yields and price – which in theory should give the government room to spend more on essential services.

And for 2026, good investing to our readers! DM