How Middle East conflict is hitting your investment portfolio — what (not) to do

The first thing to note is that there is a difference between what asset managers are explicitly saying and what the market has already done. On the asset-manager side, the clearest direct call comes from M&G Investments Southern Africa, whose February 2026 market overview said that “Sasol and other energy stocks” had benefited from higher oil prices amid geopolitical tensions. That tells us that Sasol sits firmly in the winner camp if the oil shock persists.

Ninety One is a touch more cautious and refers to sectors rather than specific stocks. Its view is that in a Hormuz-style shock, “energy equities and energy-linked sovereigns can benefit”, while a higher import bill hurts energy importers.

For a South African investor, the most obvious local translation is again Sasol first, followed by energy-linked commodity exporters such as coal companies if disruption keeps fossil-fuel prices elevated.

That is why Exxaro and Thungela have also emerged as likely beneficiaries in this environment. The case is not as clear-cut as it is for Sasol, but the logic is similar: if the conflict lifts coal demand and prices, energy-linked exporters stand to benefit.

Still, there is an important warning label here. On the face of it, Thungela may fit the macro winner theme, but on Monday this week, it also reported a full-year loss for 2025, so it comes with some baggage. In other words, not every “winner” is a safe bet. Some are simply better positioned than others in a messy macro storm.

Consumer-facing shares

On the other side of the ledger, South African retail and other consumer-facing SA Inc shares are sitting in a clear loser bucket. Stanlib has already been explicit that it is not enthusiastic about South African retail shares, arguing that local growth is only around 1.8% and that competition from Amazon and Shein makes growth hard to see.

That view predates the current oil shock, but it becomes even more relevant when conflict-driven fuel inflation puts more pressure on household budgets. Names such as The Foschini Group, Mr Price, Pepkor and Woolworths fit that pressure zone, even if Stanlib did not single out one specific share.

Consumer-facing stocks such as retailers will take a hit as higher fuel costs feed into inflation. Inflation and rand weakness squeeze discretionary spending. That, in turn, weighs on retailers and other domestically exposed businesses. So, if your portfolio leans heavily toward consumer-facing SA Inc, the risk is more of a margin-and-demand problem than a market wobble.

The market has already begun to tell this story. Public reaction on the JSE has been sharp. Sasol and Thungela were among the gainers during parts of the conflict-driven oil surge, while gold and PGM shares such as Sibanye-Stillwater, Impala Platinum, Harmony, Northam and Valterra were hit hard when precious metals reversed.

Sasol share price

That does not mean the market has settled on a final verdict. It does mean you should be wary of assuming that all “safe” commodity names will rise together. This was a selective repricing, not a blanket reward for every resource share on the board.

The knee-jerk reaction

Ryan Murphy, global head of behavioural insights at Morningstar, says when markets move sharply, investors tend to check their portfolios more often as uncertainty heightens anxiety and narrows attention. And as is well known from behavioural science research, the more often people look, the more volatility they see (and feel … and potentially act on). Loss aversion amplifies this, so even normal market movements can trigger unnecessary decisions.

“At the same time, distractions are abundant, and the brain is a pattern recognition system in overdrive. It starts trying to make sense of what’s happening – connecting dots, spotting trends – even when randomness is at play. The brain is so good at finding patterns, it can even find patterns that aren’t even there,” he says.

Murphy warns that the net effect can be a shift in your focus away from long-term goals – exactly when maintaining that long-term perspective matters most.

So, what should you do?

First, resist the urge to treat every rally as a fresh long-term thesis. A stock that spikes because oil jumps is not automatically a stock you should chase.
Second, separate direct beneficiaries from broad macro noise. Sasol is the clearest direct winner in the material. Exxaro and Thungela are more conditional calls.
Third, look at your consumer exposure. If your portfolio is packed with retail and other SA Inc counters, the conflict may be increasing risks you already had, rather than creating new ones from scratch.

And what should you not do?

Do not panic-sell quality assets just because markets are jumpy. Do not rotate your portfolio entirely into the current winners after they have already run. And do not mistake a geopolitical shock for a licence to abandon diversification.

The smarter response is usually slower and less dramatic. Understand which holdings benefit from higher oil and which ones are vulnerable to the inflation squeeze, then decide whether your current mix still matches your risk appetite and time horizon.

Ross McMillan, financial adviser at Momentum Financial Planning, recommends that you ask your financial planner these questions:

The stress test: If fuel and food prices rise by another 10% this year, how does my current cash flow hold up? Do we need to adjust my emergency fund?

The diversification check: Is my investment portfolio too exposed to local volatility? How much offshore exposure do I have to hedge against a weakening rand?

The goal alignment: Are my long-term goals, like my children’s education or my retirement plans still on track despite the current inflationary environment?

The bottom line is that the Middle East conflict is already reshaping South African portfolios, but not in a neat or uniform way.

The clearest winner is Sasol. The clearest loser bucket is local retail and other consumer-facing shares. Everything else sits somewhere on the spectrum between direct beneficiary, collateral damage and noisy market overreaction.

For investors, the real risk may not be the conflict itself, but the temptation to react too quickly, too emotionally and too late. DM