South Africa is holding up surprisingly well in the face of US President Donald Trump’s antics. His war on Iran sent oil prices spiking, his erratic tariff salvoes disrupted global trade and his direct onslaught against this country — his white genocide lies and attacks on transformation policies as “discriminatory against whites” — has made South Africa a target of the world’s most powerful government. Yet the JSE is near record highs, the rand has held its ground and foreign investors are coming back.
Compare this with the previous time oil spiked and global inflation shot up — when Russia invaded Ukraine on February 24 2022. That sent oil prices surging above $130 a barrel within days of the invasion.
Combined with post-Covid supply chain blockages, a global inflation spiral hit South Africa hard. Petrol prices rose more than 40% year on year, inflation peaked at 7.8% in July 2022 and the Reserve Bank was forced into an aggressive hiking cycle that took the repo rate from 3.5% to 8.25% within 18 months.
The improved resilience to external shocks can be ascribed to progress on reforms, combined with an improved fiscal position.
Niel Venter, head of equity research at Absa, points to the two factors working in tandem: “Positive structural reform – electricity and logistics in particular — has been well reflected by the ratings agencies, resulting in a positive underpin from offshore investors despite the uncertainty of the war.”
Tim Clark, head of equity research at SBG Securities, says the GNU and a reform programme, combined with very limited load-shedding, “provided reasonable tailwinds” to South Africa’s performance — and that the country’s improved fiscal position, “supported by precious metals exports and the balance of trade”, continues to attract foreign investors.
Venter adds a further structural point: the composition of the JSE itself has changed materially since 2022, with gold and platinum group metals counters now constituting a far larger share of the benchmark, and underlying commodity prices have held up well during the Iran conflict — providing both direct market support and a boost to the fiscus.
South Africa entered the Ukraine shock in a far weaker position: load-shedding was accelerating towards its worst levels, the fiscal position was deteriorating, Moody’s had cut South Africa to junk status only two years earlier, and structural reforms had barely begun.
The position today is materially different. Sufficient electricity is being generated for daily needs — though substantially more will be needed to meet future demand — thanks to private sector generation coming online combined with rooftop solar, as well as Eskom’s improved plant maintenance programme, which has reduced unplanned outages.
Reforms to the rail and ports system are advancing, with plans laid out and starting to be implemented. Municipal reform can best be described as still in the starting blocks — but the fact that South Africa is finally developing credible programmes, through Operation Vulindlela, to address the deep-rooted and widespread malaise of local government is in itself meaningful.
The ratings agencies have taken note. S&P upgraded South Africa’s long-term foreign currency credit rating by one notch to BB in November 2025 — the first upgrade in two decades — while Moody’s revised its outlook from stable to positive in late May 2026, and Fitch upgraded South Africa’s long-term credit rating from BB- to BB on June 5, its first upgrade in 21 years.
This improving resilience shows up directly in how global investors are reading South Africa’s capital markets. “South Africa screens well, as fiscal and balance-of-payments support from precious metals exports continues to attract foreign investors,” says Clark, adding that his firm has noted a tangible increase in inbound interest from offshore investors.
Venter points to a structural reason for this oil shock landing more lightly on South African markets than the Ukraine conflict did. When Russia invaded Ukraine in 2022, Moscow’s financial assets were physically removed from the MSCI emerging markets (EM) and GBI-EM indices, “triggering forced selling across the entire passive cross-asset complex”. South Africa was caught in that broad-based selloff. This time, Iranian financial assets were not included in those indices, so there has been no equivalent mechanical trigger for EM-wide liquidation.
Clark says a significant portion of the strong performance in 2025 resulted from a commodity and currency windfall, though he points to banks as a notable exception — their outperformance reflecting “a broader optimism towards South Africa” driven by GNU-inspired confidence rather than commodity prices. The GNU and limited load-shedding, he says, “provided reasonable tailwinds” to the overall market in 2025.
This resilience, however, is fragile — or “muddling along with constraints”, as one executive, who asked not to be named, puts it. He emphasised that driving ahead with the reform programme is imperative for future economic stability.
Domestically, political stability through the GNU remains the critical variable — local government elections and the ANC’s elective conference loom as the two events most capable of disrupting the reform momentum that has underpinned improved investor sentiment. Clark is measured but not pessimistic: “As a healthy democracy, South Africa remains resilient and, though investor confidence is likely to be somewhat volatile through these periods of uncertainty, we expect the GNU and reform agenda to remain intact.”
EM index upweighting
South Africa’s growing weight in the major EM indices is providing a structural tailwind that goes beyond market sentiment. The country’s weighting in the FTSE EM index rose from 3.16% to 4.29% in 2025, and outgoing JSE CEO Leila Fourie has identified 5% as the threshold at which passive foreign capital would flow in at meaningful scale.
Getting there, however, requires two things to run in parallel. Says Venter: “For South Africa to reach the 5% level, we would need to see the current positive trajectory with respect to structural reform continue, along with a supportive commodity cycle.” He adds an important nuance: what the market has seen over recent years is a “flowless” upweighting — driven by the positive performance of existing index constituents rather than new stocks being added, which is what triggers a fresh flow of capital.
Clark adds that economic growth is also a factor. “South Africa has struggled with growth for several years and, assuming global geopolitical risks wane, we expect that accelerating growth should lead to continued later-cycle performance of the retail and industrial sectors, supporting a higher weighting in the FTSE EM index and ultimately leading to increased passive flows.”
AI: the good, the bad and the concerns
In their valuations, analysts need to account for the risk that comes with US market concentration in tech and AI being at historic highs. The four big hyperscalers — Amazon, Microsoft, Meta and Alphabet — are collectively on course to spend close to $700bn on AI infrastructure in 2026 alone, nearly double their combined outlay in 2025, according to numerous reports, and Goldman Sachs projects their cumulative spend will reach $5.3-trillion by 2030. Whether the returns will justify that bet is the central question.
Closer to home, institutional brokers also have to manage what the technology is doing to their own businesses — and how it is affecting the analysts whose work this survey recognises.
The consensus from the sell side is that AI handles the grunt work well: screening universes, updating financial models, summarising results. But the judgment, sector knowledge and management relationships that distinguish a genuinely useful analyst remain human.
“We are using AI primarily to improve efficiency across the business, but in research its role remains supportive rather than determinative,” says Craig Smith, head of research and business development at Anchor Capital. He emphasises that analysts are ultimately differentiated by the quality of their thinking, sector knowledge, and investment insight.
He says AI is proving useful in several areas, including data capture, summarisation and the identification of potential research ideas and themes for further investigation. “However, the core value we believe we offer clients still lies in experienced/seasoned analysts applying judgment, context and deep company and industry knowledge. The impact is also likely to differ meaningfully across firms: for managers or research firms with broader global universes, AI may have a more substantial role in processing scale and complexity.”
Peresec’s Emlyn Flint says that while not perfect, AI applications and tools are still very powerful, allowing an individual to do what would have previously required a team of people, especially in terms of technical and automation tasks. “In this sense, it grants researchers incredible opportunities for improving and accelerating knowledge gain, automating generic workflows and processes, and generating answers to well-defined questions.”
The main problem of research, however, has always been quality, not quantity. “Removing the noise, finding the right question to ask, and then providing an effective, practical answer will always be the true value-add of research. AI is thus best viewed as an amplifier for existing capabilities. Strong people and processes will benefit most, while mediocre inputs and usage will still lead to mediocre outputs, albeit more of it.”
He also warns of the risks. “Large language models are also the most sycophantic of yes-men, confident in everything they produce, regardless of whether it is true. That is dangerous in research where the first rule is to not fool yourself, and your readers will notice before you do. The term ‘AI slop’ has become commonplace for a reason.”
The more structural concern, raised by both Peresec and Anchor, is about the pipeline. If AI displaces junior analyst roles, the supply of experienced analysts begins to thin within a decade. Smith notes that the real value of a seasoned analyst lies precisely in the judgment that comes from experience. “If AI materially reduces the demand for junior research roles across the sell side and parts of the buy side, the industry could ultimately face a shortage of experienced analysts in future years.”
Flint raises another concern: the “learning risk” that comes with using AI is particularly relevant for new entrants. “By allowing one to jump straight from question to answer, AI tools can rob individuals of the learning opportunities that naturally happen along the way. This is where deep knowledge is built and where the most useful insights tend to reside. Thus, what can be an enabler for experienced analysts may be a long-term impediment for new analysts.”
Structural shifts
Other structural shifts are reshaping the landscape. The long decline in the number of JSE-listed companies — from roughly 850 in the 1990s to around 250 today — shows early signs of stabilising, with the JSE’s Simplification Project opening the door to secondary listings and the delisting trend slowing. The executive cited earlier notes that the JSE’s thin tech exposure outside Naspers makes it a plausible destination for listings from that sector, as capital returns from offshore-overweight institutions.
How the market operates is also changing: Venter notes that electronic, low-touch trading has grown rapidly, forcing material investment in technology across the broking industry – a quieter revolution running alongside the more visible disruption of AI.
Who you gonna call?
André Bekker, head of South African equity research at Ninety One, distils the buy-side test for what separates the top brokers from the rest: “Who do you call first?”
“That broker almost without exception has a detailed command of the numbers, but more importantly, brings real strategic perspective on the industry and has the contacts to back it up,” he says. “The best ones have built relationships with management teams, competitors and suppliers that give you a read on a situation you simply cannot get elsewhere.”
He says the best brokers each have a different edge. “Some are exceptional with numbers, others think strategically about industries, and others have cultivated contacts that give them a genuine information advantage.”
Anthony is Krutham’s head of media projects
Methodology
Research categories have been modified following consultations with the industry. There are now 38 research categories/sectors, which are uploaded to a dedicated website, where their clients — typically asset managers — vote for their top analysts.
Brokerage firms are also ranked in an additional six service categories: administrative efficiency of back office; corporate access; dealing — derivatives; dealing — equities; dealing — fixed-interest securities; and sales team. The overall firm rankings for research quality are determined by a weighted combination of their performances across individual categories.
Results are weighted in the first instance by brokerage paid to the sell side. We also include weightings by domestic assets and unweighted results. This ensures that the survey correctly reflects achievement in the industry according to its own business objectives.
All results are audited and verified by BDO South Africa.
For the black broker award, rankings are determined by the same method used for determining the overall rankings for the research award to qualifying brokers. To qualify, firms must be more than 50% black-owned and have at least a Level 2 BEE ranking.
The young analyst awards are determined separately by the CFA Society South Africa to recognise up-and-coming talent. There are two categories, equities and non-equities, and the awards are open to analysts under 35 years.
Overall, the FM Ranking the Analysts survey serves as a significant benchmark for evaluating the quality of research provided by institutional stockbrokers in South Africa.
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