South African Equities Open Higher, PMI Data Shows Improvements

By Daniel Wesonga, Senior Sales Manager, Pepperstone

5th June 2025

South African equities opened higher on Thursday, with the JSE FTSE All Share Index pushing above the 96,000 threshold, supported by broad-based gains across sectors. Twelve out of twenty sectors advanced, led by technology services, non-energy minerals, and process industries, reflecting a firming in investor sentiment despite ongoing macroeconomic and political pressures. Losses in electronic technology, industrial services, and distribution services moderated overall gains but did not materially alter the market’s upward trajectory.

The market benefited from improved PMI data. The latter rose to 50.8 points, entering expansion territory. In this regard, stocks could continue to find support if business activity continues to grow as companies’ output rises while input prices moderate. Local firms could also benefit from improved customer confidence and rising new orders.

However, sentiment could be tempered as the Rand Merchant Bank (RMB) and Bureau for Economic Research (BER) business confidence index showed a decline in the second quarter, falling to 40 from 45, although it remained above the average for the previous years. The deterioration reflects heightened concerns over U.S. trade policy, domestic logistical issues, and uncertainty surrounding the coalition government. While the South African Reserve Bank’s recent 25-basis-point interest rate cut offers some monetary support, structural constraints continue to dampen the outlook for growth and investment.

The agricultural sector, by contrast, offers a more constructive narrative. Export volumes of grapes, maize, apples, and wine rose in the first quarter, contributing to a 10% year-on-year increase in trade.

Investors could turn to new economic data releases to gauge the health of the economy. As such, manufacturing and gold production data next week could affect the market’s direction.