Economy shows promise but investors are holding steady

Green shoots are visible in SA's financial landscape and sentiment is improving. However, private capital is staying patient, waiting for sustained growth before joining the market party in full force

- By Lindsey Schutters

South Africa passed many tests of 2025, but like any responsible parent, the investment community is pointing out the areas in which the country can still improve before it opens its purses.

"The mere fact that we're moving in the right direction is very encouraging," said Bastian Teichgreeber, Prescient Investment Management's chief investment officer.

He's right. South Africa took the energy of the film KPop Demon Hunters lead song, Golden “we're goin' up, up, up, it's our moment” and ran with it after a rocky start to the year.

The investment crowd is definitely recognising that the country is on an upward economic trajectory, and the right noises are being made around the golden opportunity in 2026.

Between the greylisting hangover and the government of national unity (GNU) infighting over the past year, local assets were trading like nobody wanted to touch them. But as we move into 2026, the mood has shifted from survival to what the suits are cautiously calling "selective participation".

The most striking change in the investment landscape isn’t just the vibe, it’s the maths. Teichgreeber highlighted that the “lower inflation risk premium” has been the sleeper hit of the year.

When the Reserve Bank signalled a tighter handle on inflation, moving structurally towards that 3% anchor, the market stopped hyperventilating.

"The reduced uncertainty around macroeconomics and inflation has compressed," he explained. "And with less risk premium, you can see lower yields, stronger equities and a stronger currency."

And at least one of the global ratings agencies agrees that this may just be South Africa’s moment. S&P’s decision to upgrade the country's sovereign credit rating outlook was the backing vocal it so desperately needed.

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