ZEP Relief Signalled as Growth Outlook Dims, While Markets Extend Gains
A shift in government’s approach to Zimbabwean Exemption Permit (ZEP) holders, a downgrade to South Africa’s economic growth outlook, and renewed warnings about the state of the mining sector shaped developments on Tuesday, even as financial markets moved higher.
Deputy Home Affairs Minister Njabulo Nzuza indicated that ZEP holders may apply for permanent residence, marking a change from previous policy that barred such applications.
At the same time, the International Monetary Fund cut South Africa’s 2026 growth forecast, citing global pressures linked to conflict in the Middle East. Despite this, the Johannesburg Stock Exchange closed firmer, supported by gains across key sectors.
Broad-based rally lifts JSE as resources, property and tech stocks advance
The All Share Index (ALSI) rose 1.10% to close at 119,796, trading near the upper end of its intraday range of 118,897 to 120,416. The upward move reflects a broad-based recovery, with most major sectors ending in positive territory and gains sustained throughout the session.
Resource stocks led the market higher, with the Resource 10 index climbing 1.34% as precious metal prices strengthened. Industrial shares followed, rising 1.13%, supported by gains in technology-linked counters and consumer-facing companies. Financial stocks added 0.81%, indicating more measured but still positive sentiment toward banks and insurers. Property counters recorded some of the strongest gains of the day, with the SA Property index advancing 1.53%, as investors returned to yield-sensitive assets.
Among individual counters, Impala Platinum surged 4.29% in line with higher platinum prices, while Bytes Technology Group gained 4.17%, reflecting improved appetite for growth stocks. Hammerson rose 4.10%, contributing to the property sector’s strength, and Richemont added 2.57%, providing support to the Top 40 index.
Losses were more limited but notable in specific counters. Karooooo declined 8%, making it the worst performer among large-cap shares. Thungela Resources fell 3.44%, while British American Tobacco dropped 3.24%. Other declines were seen in energy and diversified mining shares, reflecting some weakness in those segments.
Trading activity remained concentrated in large-cap stocks, with FirstRand leading in volume and value traded, followed by AngloGold Ashanti and Naspers. MTN Group and Old Mutual also featured among the most actively traded counters, indicating continued investor focus on liquid, large-cap shares.
Rand strengthens as precious metals rise and oil prices ease
The rand strengthened 0.47% to R16.34 against the US dollar, continuing a recent trend of resilience supported by commodity prices and global market conditions. It also firmed against the euro to trade at R19.28, although it weakened slightly against the pound and the Australian dollar.
Commodity markets were mixed but broadly supportive of the local market. Gold rose to $4,800 per ounce, extending its upward trend, while silver surged 4.73%, outperforming other precious metals. Platinum added just over 1%, contributing to gains in mining shares listed on the Johannesburg Stock Exchange.
Global markets remain firm despite escalating geopolitical tensions
Global equity markets continued to trade near recent highs, with major indices showing resilience despite heightened geopolitical uncertainty. The S&P 500 remained close to the 7,000 level, while European markets, including Germany’s DAX and France’s CAC 40, held steady.
In Asia, Japan’s Nikkei traded above 57,800, reflecting continued strength in that market. Investor sentiment globally has remained supported by liquidity conditions and demand for growth assets, even as risks linked to geopolitical tensions persist.
Cryptocurrency markets also moved higher, with Bitcoin rising to just below $75,000, alongside gains in Ethereum and other digital assets, indicating broader strength in risk-sensitive assets.
IMF cuts South Africa’s growth forecast as global outlook deteriorates
The International Monetary Fund (IMF) has lowered South Africa’s GDP growth forecast for 2026 to 1.0%, down from 1.4% projected earlier in the year. The revision reflects the impact of rising global uncertainty, particularly linked to conflict in the Middle East and its effect on energy markets.
The IMF also reduced its global growth forecast from 3.3% to 3.1%, highlighting broader economic pressures. It warned that further increases in energy prices could slow global growth further and increase inflation, particularly in emerging markets.
The downgrade marks a shift from earlier expectations of improved economic performance in South Africa following modest gains in 2025. With growth remaining weak, the country continues to face constraints related to structural challenges and external shocks.
Government signals policy shift allowing ZEP holders to apply for residency
The ZEP programme was introduced in 2009 to accommodate Zimbabwean nationals following economic and political instability in their home country. It has been extended multiple times, with the current extension set to expire in May 2027.
The latest comments from government have been welcomed by legal representatives involved in the case, although they note that the position has not yet been formalised in policy.
Junior mining sector faces constraints as exploration investment declines
A report released by the Minerals Council South Africa has highlighted ongoing challenges in the country’s junior mining sector. These include regulatory delays, limited access to funding and the impact of illegal mining operations.
The report notes that while junior, small-scale and micro miners account for a significant share of mining licences issued, they contribute a relatively small portion of overall mining revenue. Exploration activity has declined sharply, with South Africa now accounting for less than 1% of global exploration spending.
The absence of a fully functional mining cadastre system has also been identified as a constraint, limiting transparency and complicating the allocation of mineral rights. In addition, illegal mining activity has increased, creating further challenges for legitimate operators.
The Minerals Council has recommended measures to support the sector, including improving regulatory processes, increasing access to financing and encouraging exploration activity. It also highlighted the potential for job creation and economic contribution if the sector is strengthened.
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