South Africa’s benchmark stock index is heading for its best month in almost a year, with a helping hand from China’s most valuable company.
The FTSE/JSE Africa All Share Index is up more than 7% in dollar terms in May, on track for its biggest monthly gain since June last year and its best May performance since 2013. It has outperformed emerging market peers as well as the S&P 500 and the Stoxx Europe 600.
The largest contributor to the rally has been tech investor Naspers, which soared after China’s Tencent Holdings in which it owns a stake, reported a faster-than-anticipated 13% rise in sales.
Naspers, which accounts for more than 12% of the index, contributed one fifth of the monthly gain in index points. That’s almost three times as much as any of the next three stocks, which include two platinum miners and Prosus — which holds Naspers’ stake in Tencent.
Whether the rally continues will depend on the South African coalition government’s commitment to push through economic reforms, metal prices and the “sell America” trade that is driving investment to developing nations, said Peter Takaendesa, head of equities at Mergence Investment Managers.
“If a few stars align such as continued fund flows towards emerging markets, and structural reforms in South Africa pick up some pace at the same time with a continued broader recovery in global commodity prices, then our market could continue to push higher,” Takaendesa said.
Investor optimism
Naspers has climbed more than 5% this month on investor optimism that Tencent will weather the challenging economic outlook in the coming months. The WeChat operator’s sales rose to C¥180-billion (R448-billion) in the March quarter, as it benefited from the Chinese tech comeback triggered by DeepSeek.
Platinum producers Sibanye Stillwater, Northam Platinum and Impala Platinum were also among the top performers as the metal rose to a two-year high.
Domestic-facing sectors such as retailers and banks, however, underperformed as political uncertainty damped consumer confidence and the outlook for the economy soured, Takaendesa said.
Read: Naspers and Prosus appoint veteran insider as CFO
The South African Reserve Bank resumed its easing cycle on Thursday to offer support to the stuttering economy as inflation remains benign. The monetary policy committee cut the benchmark interest rate by 25 basis points to 7.25%, the lowest in more than two years, while downgrading its forecasts for economic growth.
The cut will provide support for some sectors such as retailers, Unum Capital analyst Lester Davids said. — Khuleko Siwele, with Ntando Thukwana, (c) 2025 Bloomberg LP
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