Goldman says mining stocks to help drive South African equities

South African stocks are set to extend this year’s rally, supported by a weaker dollar and strong mining stocks, according to Goldman Sachs Group Inc. strategists.

“We have a bullish view on gold but also think there will be some improvement in domestic growth,” Sunil Koul, emerging market equity strategist at the firm, said in an interview.

The bank upgraded South African equities to overweight in August and expects a further increase of 6.3% for the FTSE/JSE Top40 Index over the next year. The gauge is up 44% in dollar terms so far in 2025, which compares with a 23% advance of the MSCI Emerging Markets benchmark.

The index now trades at 11.5 times forward earnings, at a 17% discount to the emerging-markets benchmark.

A slide in the greenback allowed the South African central bank to keep rates at the lowest since November 2022, boosting local shares. Meanwhile, the surge in gold price aided mining stocks, with Gold Fields Ltd. and Anglogold Ashanti Plc among the biggest gainers.

“The dollar will continue to weaken from current levels as well as Fed being dovish, which also allows many of EM central banks, including South Africa, to find chances to ease rates where possible,” Koul said.

(By Khuleko Siwele)

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