The JSE: A tale of two markets

Over the last decade, the Johannesburg Stock Exchange (JSE) has seen a complex and often contradictory performance, heavily influenced by a mix of local challenges and global trends.

While key indices have shown positive nominal growth, this has been largely driven by a small number of globally exposed companies and a cyclical boom in commodities, masking a more stagnant domestic economy. The JSE’s journey from 2015 to 2025 has been a tale of two markets: a robust, globally connected segment and a struggling, domestically focused one.

Overall Index Performance

The JSE’s primary benchmarks, the FTSE/JSE All-Share Index (ALSI) and the FTSE/JSE Top 40 Index, have delivered positive returns over the last ten years. For instance, the FTSE/JSE Top 40 Index has provided a cumulative return of around 120% over the last five years, translating to a compound annual return of roughly 17.1%. Over a ten-year period, the JSE All-Share Index has a cumulative return of approximately 162% when measured in rand terms.

Global Giants vs. ‘SA Inc.’

A key factor in the JSE’s performance is the bifurcation of its market. The top-performing stocks are not necessarily those that rely on the South African economy. Instead, the JSE’s performance has been disproportionately influenced by a handful of large, multinational corporations that derive the bulk of their revenue offshore. Companies like Naspers, Prosus, and Anheuser-Busch InBev have consistently been among the top contributors to the index’s growth. Their performance is driven by international factors and global market trends, shielding them from South Africa’s economic headwinds.

In stark contrast, the performance of “SA Inc.”—companies heavily reliant on the domestic economy, such as retailers, banks, and property firms—has been considerably less impressive. These sectors have grappled with the triple threat of slow economic growth, high unemployment, and stagnant consumer spending. This creates a disconnect where a “flying JSE” exists alongside a “grounded South African economy,” leaving many local investors feeling the stock market’s gains don’t reflect their day-to-day financial reality.

The Commodity Cycle

South Africa’s resource-rich economy means that the JSE is highly sensitive to fluctuations in global commodity prices. The period from 2015 to 2020 saw a downturn in many commodity prices, which weighed heavily on the performance of mining and resource stocks. However, a significant reversal in this trend from 2021 onwards, particularly in precious metals like gold and platinum, has been a major tailwind for the JSE.

The commodities boom has driven phenomenal returns for companies like Gold Fields, Sibanye-Stillwater, and Impala Platinum. This cyclical upswing has been a primary engine of growth for the JSE, contributing significantly to its recent outperformance relative to other global indices like the S&P 500 and the MSCI World Index in 2025. While beneficial for the index, this reliance on commodities exposes the market to volatility and external shocks, making it vulnerable to future downturns in global demand.

Challenges and Trends: From Delistings to ESG

Beyond the performance numbers, the JSE has faced structural challenges. There has been a notable trend of de-listings, as companies are either bought out by private equity firms or seek to list on international exchanges with deeper pools of liquidity. This, coupled with a decline in new listings, has raised concerns about the exchange’s long-term health and its ability to attract and retain companies.

In response, the JSE has undertaken various reforms to simplify listing requirements and make the exchange more attractive. There’s also been a growing focus on Environmental, Social, and Governance (ESG) factors, with more investors seeking to align their portfolios with sustainable practices. This shift has led to an increase in listings of companies with strong ESG credentials and a growing market for green bonds, signalling a move towards a more modern and responsible investment landscape.

The JSE’s performance over the last decade has been a story of resilience driven by a few dominant, globally oriented players and a favourable commodity cycle. While the headline numbers show positive growth, they mask the underlying struggles of the domestic economy and a market that has become increasingly fragmented. For investors, understanding this dual nature is crucial to navigating the JSE’s future.

The information contained in this article is of a general nature and intended for information purposes only. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial, legal or other issue. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner/adviser to take into account your particular investment objectives, financial situation and individual needs.