South Africa's equity market reaches highest value since 2019

The FTSE/JSE Africa All Share Index's market capitalization climbed above $500 billion, supported by gains in precious metals and a rand that strengthened about 14% last year; the Johannesburg bourse rose 38% over the same period.

South Africa's benchmark equity index has reached its largest market value since 2019, supported by a stronger rand and rising metals prices. The FTSE/JSE Africa All Share Index's listed shares exceeded $500 billion on Tuesday. The Johannesburg bourse posted a 38% gain last year, its best performance since 2005, led by precious metals and mining stocks. The rally has continued into the new year as both the rand and the gold price have advanced. Key details: - The FTSE/JSE Africa All Share Index's market capitalization rose above $500 billion, overtaking markets such as Norway, Malaysia and Turkey on a year-on-year basis. - The Johannesburg bourse gained 38% last year, with an index of precious metals and mining stocks leading the advance. - The rand strengthened about 14% against the U.S. dollar last year, which boosted dollar-denominated returns on South African stocks to around 57%. - The gauge has gained more than 2% so far this year, and the rand reached about 16.31 per dollar, its strongest level in more than three years. - Societe Generale strategists cited a next rand target between 16.10 and 15.90 per dollar, and BlackRock’s Evy Hambro said gold could sustain its rally while some mining shares have yet to fully catch up. - South Africa’s weighting in the MSCI Emerging Market Index rose above Saudi Arabia’s in November, and an analyst at Unum Capital said that higher weight could prompt mechanical buying from passive funds. Summary: The market-value increase reflects a combination of stronger local currency performance and rising metals prices, which lifted the FTSE/JSE All Share Index above $500 billion. Analysts reported that larger index weight in MSCI Emerging Markets may lead to passive flows that support South African equities, and strategists have identified a near-term rand range to watch. Undetermined at this time.