Shares and the rand stay strong in a week of drama, ALSI on a record high

DESPITE all the attention on the RSA (Ramaphosa) and Trump(US) stand-off to gain political points at the news conference last Wednesday, as well as the “don’t want to cut the national government salary account” third national budget, financial markets in South Africa seem to react on the real issue of the US/SA negotiations, South Africa's promising inflation data and foreign investment interest, that pushed the Rand/$ exchange rate to a new record level for 2025 and the ALSI to a new all-time record.

- CHRIS HARMSE

The ALSI closed Friday higher for the fourth consecutive week at an all-time high of 93 529. This is a weekly rise of 1.0% and now has gained 10.8% since the beginning of the year and 18.0% over the last year. Once again, this movement is in sharp contrast to equity prices in the US and Europe.

The above bullish movement in equities underpins more favourable economic prospects for South Africa during 2025. Gold and Platinum continuous upward movements, the inflation rate increasing only marginally from 2.7% in March 2025 to 2.8% in April (seven consecutive month lower than the midpoint of 4.5%) and the decision by treasury to increase the fuel levy by 16 and 15 cents per liter, without putting a burden on the motorist over the short run all contributed to the positive sentiment on markets.

As the over-recovering in the price of petrol currently stands at 19 cents per liter and forty-one cents for diesel, with prospects for lower global oil prices and a stronger Rand over the next six months.

Issues that matter after the trade negotiations between the US and SA

It seems that genuine issues that were talked to in the white house between President Ramaphosa and President Trump were favourable for South Africa. It is expected that the AGOA agreement will continue, President Trump will attend the G20 summit, at talks in boost bilateral trade and investment, will continue.