Monday Market Watch

Here are the top 5 things happening in the South African Economy this week.

-15 September

1. Stock Market Hits Record Highs Amid Economic Challenges

Despite weak economic data and slow reforms, South Africa's financial markets have performed strongly. The Johannesburg Stock Exchange (JSE) reached record highs again, standing at 104 408, and the rand strengthened and currently trading at 17.35, even in the face of 30% U.S. tariffs on exports. Analysts attribute this optimism to strong commodity prices and perceived political stability within the coalition government, following the resolution of a budget dispute. Read more here

South Africa's online retail market is projected to exceed $7 billion (R130 billion) in 2025, accounting for nearly 10% of total retail sales. This growth is driven by platforms like Amazon, Takealot, Shein, and Temu. However, the rapid expansion raises concerns about job losses in traditional retail sectors and the digital divide, as many South Africans still lack access to the internet and digital devices. Read more here

3. Inflation Expectations Survey Ahead of Reserve Bank's Rate Decision

The South African rand remained steady ahead of the release of the third-quarter inflation expectations survey by the Bureau for Economic Research. The survey, expected to reflect how inflation is anticipated to evolve over the next three years, is crucial for the South African Reserve Bank (SARB) as it influences monetary policy decisions. The SARB is set to announce its next interest rate decision on Thursday. Read more here

4. Discovery Ltd Reports 30% Increase in Annual Profit

South African health insurer Discovery Ltd reported a 30% increase in its full-year profit, with normalized headline earnings rising to 9.8 billion rand ($559.75 million) for the year ending June 30. The company experienced strong performance across its operations, particularly in its main division, Discovery South Africa, which encompasses insurance and banking. Customer numbers in its retail banking division grew by 30%, while loans and deposits increased by 39% and 26%, respectively, driving significant revenue growth. Read more here

5. Petrol Price Drop Offers Relief Amid Economic Strain

South Africa is experiencing a drop in petrol prices, with both 93- and 95-octane petrol prices decreasing by about 4 cents per liter, and diesel prices falling by 56 to 57 cents per liter. The reduction is driven by improved international oil prices, a stronger rand, and government intervention. This price drop provides relief to motorists, businesses, and the broader economy, easing financial pressure on consumers facing persistent inflationary challenges.

Have a fantastic week

Your Financial Planning Partner.