South Africa Stocks 'Resilient' Despite Tariffs, JSE Says

Bloomberg

11-03-2025

CC-Transcript
00:00 Leila, always great to speak with you. Thanks so much for joining us. I first want to start on this news before we get to the earnings from the JSE on what we're seeing with the Trump tariffs and get your insight into any concern that you may have that potentially this feeds into the investor confidence that we've seen here in South Africa revive. And also South Africa's economic revival. Are you worried at all about that? Jennifer Of course, uncertainty is never good for markets. However, the South African economy has proven to be reasonably resilient around the trade tariff situation and particularly the US South Africa situation. The rand is held up well. Our stock market is up ahead of the Nasdaq. It's in line with the emerging market indices. So the exuberance and the positive perspective that investors have had post the establishment of the government of national unity appears to be holding at the companies on the on the JSE are well-capitalised. They have a good growth runway ahead of them. And our outlook is cautiously optimistic. Cautiously optimistic. Talk about that, Leila. What is the caution that's feeding in to your outlook for 2025, especially when you consider what you saw in 2024? So 2024 was a tale of two halves. The first half was deeply concerning and and low levels of liquidity. The second half post the government of national unity establishment after the general elections in South Africa. So are both are all share index top 40 surge and volume then you traded also surged. So we ended the year up 9% on our all share versus the MSCI Emerging Markets Index, which was up 5%. We've continued to grow off the back of that this year. Our average daily value traded is up 45% and our indices are up around 2%, so very much in line with emerging market indices. And while we are cautiously optimistic, the because of the establishment of a coalition government, the coalition government has proven to be robust. It's proven to be very effective and democracy is working in South Africa. So very different to some of the examples that you might see in the European environment like Germany and France. Growth is is looking good. Our power security has improved remarkably and the economy is is on a good footing. Hmm. Leila, is your expectation then, for the Bourse that we'll see more IPOs? Last year, you told us. The expectation was that we'd actually see ten in 2024. That didn't necessarily pan out. What's your expectation for 2025? Our expectation again, is cautiously optimistic. It has improved. We've seen we did see eight IPOs on the exchange. We've seen a surge in our in our bond listings space in the sustainability ESG space up 133% and in structured products on the equity in the equity space. We are starting to see an increase in business confidence and an increase in growth prospects and CapEx cycles. So those are starting to open up and create a pathway for listings. But we are still cautiously optimistic. We're not out of the woods. What does that mean? What does that mean, though, for the IPOs you expect? We we don't have a number of IPOs that we that we publish, but we do have a number of big IPOs that are in the pipeline have been for some time. Companies like Canal Plus have signaled openly that they are also considering listing secondary listing on the JSE. Coca-Cola has continued to consider a listing on the JSE and we have a number of local companies. Of course, Anglo American will be unbundling Anglo platinum in the middle of the year and that should unlock shareholder value.