US Slams South Africa Over Iran Naval Drills as Markets Turn Cautious and Zero-Tolerance Drink-Driving Law Looms
The U.S. once again tops the headlines, sending a clear diplomatic signal that South Africa’s foreign policy choices are under growing international scrutiny.
Washington’s unusually blunt condemnation of South Africa’s naval exercises with Iran has landed at a sensitive moment for the country, raising fresh concerns about geopolitical risk, trade relations, and investor confidence.
Locally, government has moved to clamp down on drinking and driving, with a proposed zero-tolerance policy and immediate intervention in the taxi industry.
Against this backdrop, financial markets ended the day largely flat, reflecting a cautious mood as investors weigh political noise, regulatory shifts and competitive pressures across sectors.
US sharpens tone over South Africa’s Iran ties
The statement followed confirmation that Iran’s Corvette Naghdi was actively participating in the sea phase of Exercise Will for Peace 2026, which began off Simon’s Town on 13 January.
The multinational drill includes naval vessels from South Africa, Russia, China, Iran and the United Arab Emirates, with several other countries observing. While the SANDF maintains that the exercise focuses on maritime safety, humanitarian cooperation and shipping security, the inclusion of Iran has triggered significant diplomatic fallout.
Confusion intensified after the SANDF deleted an earlier post suggesting Iran was not participating, contradicting reports that Tehran had scaled back its involvement following political pressure linked to AGOA renewal talks.
Defence analyst Darren Olivier noted on his Twitter account that Iranian vessels were clearly seen heading out to sea alongside other warships, despite assurances from government that Iran had been asked to withdraw.
The statement went further, accusing South Africa of hypocrisy for aligning itself with Iran while Tehran suppresses peaceful protest at home. While the Presidency later issued a carefully worded statement calling for restraint and respect for human rights in Iran, the diplomatic damage was already done.
Zero tolerance on drinking and driving moves closer
On the domestic front, transport authorities signalled a major policy shift that could have far-reaching social and economic implications. Government confirmed plans to introduce a total ban on drinking and driving, scrapping long-standing legal thresholds that allow limited alcohol consumption before getting behind the wheel.
Transport Minister Barbara Creecy described the current framework as outdated and morally indefensible, saying it is impossible to justify to families who have lost loved ones on the roads. Amendments to Section 65 of the National Road Traffic Act are now being prepared to introduce a clear zero-tolerance approach.
At the same time, the South African National Taxi Council announced the immediate rollout of breathalyser systems in taxis, starting with long-distance routes. These devices will prevent vehicles from starting if alcohol is detected and will require additional tests during trips, supported by in-vehicle monitoring cameras.
While preliminary festive-season data showed a 5% decline in accidents and fatalities, Creecy said the death toll remains a “national shame”, with human behaviour — particularly speeding and drunk driving — still the dominant cause of road trauma. Notably, most fatal accidents occurred on secondary roads and involved private vehicles rather than taxis.
Markets tread water as investors stay selective
Against this complex backdrop, the South African market ended Thursday’s session essentially unchanged. The JSE All Share Index edged up just 0.01% to close at 120,870, masking a session marked by rotation beneath the surface.
Industrials weighed on performance, with the Industrial 25 sliding nearly 1%. Heavyweights such as Richemont, Prosus and Naspers fell between 3.5% and 4%, as investors locked in profits and reassessed offshore exposure. Richemont’s decline came despite solid sales momentum, underscoring persistent caution around global luxury demand.
Resource shares also softened, tracking weaker commodity prices. Brent crude slipped close to 3%, pressuring energy counters such as Sasol, while gold eased in dollar terms. Although platinum and palladium posted gains, the broader mining sector lacked momentum.
Financials provided the main support. The Financial 15 index rose 1.58%, driven by strength in banks and insurers. Non-life insurance outperformed sharply, while stocks such as Sanlam and Ninety One featured among the day’s top gainers, reflecting confidence in domestic earnings resilience and selective bargain hunting.
Smaller companies fared better, with both the Mid Cap and Small Cap indices closing higher, and several stocks reaching new 52-week highs.
The rand strengthened modestly against the dollar to around 16.35, offering limited relief but continuing to pressure rand-hedge shares.
Walmart ups the pressure in retail
Beyond the market close, competitive dynamics in the retail sector remain firmly in focus. Walmart’s direct entry into South Africa has intensified price competition, with data showing the retailer consistently undercutting Checkers and Pick n Pay on everyday groceries.
The group’s “Every Day Low Prices” model, supported by its new app and rapid delivery offering, is already attracting cost-conscious consumers.
While Shoprite’s former CEO Whitey Basson has questioned whether Walmart can sustain this approach without local scale, the pressure on margins across the sector is real — and investors are watching closely.
Important Notice and Disclaimer
This article is provided for general information and educational purposes only and does not constitute financial advice as defined by the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act). The content should not be relied upon as a basis for making any investment decisions.
Please consult with a licensed financial advisor to determine if such investments are appropriate for your individual circumstances.
Everest Wealth Management (Pty) Ltd is an authorised Financial Services Provider (FSP 795) and a registered credit provider NCRCP 21504.