JSE hits record high, but trade risks, weak growth and policy uncertainty weigh on South Africa’s outlook
The JSE has been pushed to a fresh record this week, driven by strong commodity prices and gains in heavyweight mining shares. Yet the broader economy remains under pressure, with new trade threats from the United States (U.S.), rising regulatory demands on employers, weak long-term growth and major immigration reforms highlighting the gap between market performance and economic reality.
Markets: Resource rally drives the JSE to new highs
The South African market closed higher on Tuesday, with the JSE All Share Index rising 0.68% to end the session at 120,964 points, its highest level on record. The index traded firmly throughout the day and finished at the top of its intraday range, supported mainly by strong gains in mining and resource-linked shares.
Gains were seen across most market segments. Industrials advanced 0.63%, while mid-cap and small-cap shares both gained around 0.6%, indicating broad-based buying interest. The strongest performance came from the Resource 10 index, which surged 2.12% as investors rotated into precious metal producers.
By contrast, the Financial 15 index slipped 0.87%, with banks and insurers continuing to lag as high interest rates, weak credit demand, and subdued domestic growth weighed on the sector.
Mining shares dominated the list of top performers. Gold Fields, AngloGold Ashanti, Sibanye-Stillwater, and DRDGOLD posted solid gains as gold traded above $4,600 an ounce. Platinum and palladium recorded even stronger advances, while Sasol rose more than 4% despite Brent crude holding steady near $65 a barrel.
Trading activity remained concentrated in heavyweight shares, with Naspers and major mining counters accounting for a significant share of total value traded.
The rand traded slightly firmer at around R16.36 to the dollar, supported by higher commodity prices. Bitcoin also advanced, trading above $95,000 in early dealings, adding to a broader risk-on tone.
US tariff threat raises stakes for South Africa
While markets pushed higher, geopolitical risk increased. U.S. President Donald Trump announced that any country doing business with Iran would face a 25% tariff on all trade with the United States, a move that could have serious consequences for South Africa.
Although South Africa’s direct trade with Iran is small, the risk lies in its exposure to the U.S. market. South Africa exports billions of rand worth of vehicles, automotive components, and precious metals to the U.S. each year and enjoys a trade surplus of R36 billion.
Around 22% of South African exports to the U.S. benefit from the African Growth and Opportunity Act (AGOA), which allows duty-free and quota-free access for certain goods. Trade unions estimate that trade with the U.S. supports more than 400,000 jobs locally, with nearly 100,000 directly linked to AGOA.
By comparison, South Africa’s trade with Iran, Russia, and Palestine is minimal, underlining the imbalance in economic risk should US tariffs be imposed.
Employers face key deadline under employment equity laws
Domestically, regulatory pressure is mounting. The Department of Employment and Labour has warned designated employers that they have until Thursday, 15 January 2026, to submit their annual Employment Equity reports.
This is the first year the amended Employment Equity Act applies, requiring businesses with 50 or more employees to implement five-year employment equity plans aligned with sector-specific targets. Failure to comply could result in fines of up to R1.5 million or 2% of turnover, as well as the loss of compliance certificates required for government contracts.
The changes have sparked legal and political debate. The Democratic Alliance has challenged the constitutionality of key sections of the act, with a ruling still pending.
South Africa’s shrinking share of the global economy
Long-term data continues to highlight South Africa’s structural challenges. The country’s share of global GDP has declined from 0.54% in 1994 to 0.37% today, despite nominal GDP growth to about $400 billion.
Measured by purchasing power parity, South Africa’s share of global output has fallen from 0.75% to 0.48%. Its share of Africa’s GDP has also halved as faster-growing economies on the continent have pulled ahead.
While the early years of democracy delivered stronger growth, the past 15 years have been marked by electricity shortages, logistics failures, rising debt and a weakening currency.
Immigration reforms target skills and investment
The government is proposing major changes to South Africa’s immigration system. The Department of Home Affairs (DHA) plans to tighten retirement visas, introduce minimum age thresholds, and raise financial requirements to curb abuse.
A points-based system is being considered for permanent residence and citizenship, prioritising skills, investment, and job creation. Proposed new visas include a Skilled Worker Visa, a Start-Up Visa, and an Investment Visa, aimed at attracting migrants who can contribute directly to economic growth.
Public comment on the draft White Paper closes on 31 January 2026.
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