Global equities edged higher despite a large sell-off in the AI-themed stocks. Semiconductor companies continued to gain market share, while the software sector has taken the brunt of the market correction due to concerns around AI disruption. Developed markets were supported by the broader US bourse, as well as UK and European equities. Emerging markets outperformed their developed market peers for the third consecutive month, in the supportive environment as commodities surged and the semiconductor sector gained. Geopolitical events in the Middle East contributed to a further boost for energy and precious metal prices.
South African equities delivered high single-digit returns yet again, as resources continued to push the index higher followed by the financial sector outperforming the All Share index. The budget speech was conservative in nature, and markets reacted well to prudent fiscal policy, which focused on supply-side incentives through tax relief. Bond yields declined and inflation-linked bonds saw a significant boost.
- The JSE All Share continued its 2026 momentum, gaining 7.0% over the month.
- Resources (up 13.3%) which jumped higher, and Financials (up 7.3%) pulled the local bourse upwards, as Industrials (up 0.1%) lagged in relative terms, detracting from the broader index.
- Small-caps (up 5.3%) soared, as Mid-caps (up 5.4%) edged ahead, and Large-caps (up 7.2%) raced to secure the top spot.
- South African property markets grew substantially, as the ALPI added 6.3%, and the S&P SA REIT Index gained 8.2%.
- SA Nominal Bonds (up 1.7%) added modest returns, and Inflation-Linked Bonds (up 3.7%) recorded a strong month.
- Developed market equities struggled to gain momentum, as the MSCI World Index (up 0.8% in USD) inched into the green in what was a bumpy month for developed markets. Emerging market equities, however, weren’t to be stopped, as the MSCI Emerging Market Index (up 5.5% in USD) closed significantly higher.
- The Rand strengthened in January, appreciating against major currencies. Relative to the US Dollar (Rand appreciated 0.7%), the Euro (Rand appreciated 1.5%) and the Pound Sterling (Rand appreciated 2.8%).
- Resources had a positive month, as Gold (up 11.0%), and Platinum (up 12.5%) gained double-digit returns. Brent Crude added 2.5%, as geopolitical tensions increased.
Source: Factset
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