Today’s market analysis on behalf of Daniel Wesonga, Senior Sales Manager at Pepperstone
7th March 2025
South African equities continue to advance, with the FTSE Top 40 approaching 81,000 points. However, market sentiment remains mixed, with 13 out of 20 sectors closing in the negative. The electronic technology sector underperformed, with Powerfleet Inc down by 7.41%, while the technology services sector showed solid performance, with companies such as Metrofile Holdings, Naspers, and Ayo Tech Solutions rising by 7.86%, 5.37%, and 5.26%, respectively. The outlook for South African equities remains positive, supported by strong performance, but volatility is expected as sector dynamics shift.
South Africa’s current account deficit shrank more than expected in Q4-2024, declining to 0.4% of GDP from 0.8% in the prior quarter. In 2024, the deficit stood at 0.6% of GDP, a marked improvement from 2023’s 1.6%. This narrowing deficit was driven by a widening trade surplus, which increased in Q4, supported by a rise in export values. With the trade surplus more than doubling to 3% of GDP for 2024, these developments provide a favorable foundation for market confidence, particularly in export-driven sectors.
Meanwhile, the U.S. has suspended most aid to South Africa following a controversial executive order by President Trump. This could weigh on investor sentiment, creating short-term volatility in domestic equities.