INVESTMENT MARKET UPDATE
SEPTEMBER 2025
What developments have unfolded in local and global markets throughout the month of SEPTEMBER?
0.25%
US Fed cut for the 1st time this year
+25.5%
Resources performance
7.00%
SA repo rate remained unchanged
ADVANTAGE - SEPTEMBER COMMENTARY:
GLOBAL MARKETS
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đ Global Markets: New Highs, Rate Cuts, and a Pause in Trade Tensions
Global markets continued their strong momentum in September, with equities powering to new all-time highs. The S&P 500 led the charge, supported by tech sector strength and a dovish pivot from the U.S. Federal Reserve, which cut interest rates by 0.25%, bringing the federal funds target range to 4.00%â4.25%. Fed Chair Jerome Powell described the move as a ârisk-management cut,â prioritising employment over inflation as labour market softness emerged.
Markets initially hesitated but rallied after the Fed signalled a cautious, supportive stance, with investors now expecting two more rate cuts by year-end. The U.S. dollar weakened, and gold surged past $3,800/oz, up 45% year-to-date, driven by central bank buying, geopolitical risks, and concerns over Fed independence.
In trade news, the U.S. and China extended their tariff truce by 90 days, easing immediate tensions and stabilising global supply chain sentiment. Asian markets responded positively, especially in export-driven sectors, though questions remain about whether this is a temporary reprieve or a step toward a lasting resolution.
Elsewhere:
- Japanâs Prime Minister Shigeru Ishiba resigned after electoral losses. His expected successor, Sanae Takaichi, is seen as a stabilising figure despite her ultra-conservative stance. Markets remained calm, supported by expectations of continued stimulus.
- The European Central Bank and Bank of England held rates steady at 2% and 4%, respectively, in line with expectations.
Global Market Highlights (Quarter & YTD in USD):
- MSCI World Index: +7.4% Q3 | +17.8% YTD
- MSCI Emerging Markets: +10.9% Q3 | +28.1% YTD
- S&P 500: +8.1% Q3 | +14.8% YTD
- DAX (Germany): -0.2% Q3 | +35.7% YTD
- Nikkei 225 (Japan): +9.1% Q3 | +21.9% YTD
- Gold: +45% YTD. ending Q3 above $3,800/oz
- US Treasury Index: +0.9% (September)
- Bloomberg Global Aggregate Bond Index: +0.7% (September)
Key Themes for Investors:
- Central banks remain supportive, with the Fed cutting rates and others holding steady.
- Gold and PGMs continue to shine, driven by safe-haven demand and strong industrial use.
- Tariff truce between the U.S. and China offers short-term relief but long-term uncertainty remains.
- South African equities are performing well, but the rally has been narrow, led by a few large-cap names.
- Domestic-focused stocks offer compelling value, especially given the disconnect between bond yields and equity valuations.
- Eskomâs turnaround and rail reforms signal progress on structural challenges, supporting long-term investor confidence.
Rand / US Dollar:
- In September, the Rand gained 2.4% against the USD, from 2.3% in August.
- The average monthly appreciation this year has been 1.0%.
- When the monthly appreciation of the Rand relative to the USD is larger than previous months, it signals a good time to be buying USD in terms of momentum.
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Rand / Euro:
- In September, the Rand gained 1.9% against the EUR, from 0.3% in August.
- The average monthly depreciation this year has been 0.3%.
- When the monthly appreciation of the Rand relative to the EUR is larger than previous months, it signals a good time to be buying EUR in terms of momentum.
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Rand / British Pound:
- In September, the Rand gained 2.9% against the GBP, from 0.2% in August.
- The average monthly appreciation this year has been 0.2%.
- When the monthly appreciation of the Rand relative to the GBP is larger than previous months, it signals a good time to be buying GBP in terms of momentum.
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SMARTIE BOX IN RANDS:
LOCAL MARKETS
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South African Markets: Growth Surprise, Rate Pause, and Structural Progress
In a major turnaround, Eskom reported its first full-year profit in eight years, posting R16 billion in after-tax earnings. This was driven by government debt relief, higher tariffs, and a sharp reduction in power cutsâjust 13 days of outages in the latest financial year compared to 329 days the year before.
new consolidated quarterly reports
- The JSE All Share gained ground over the month, up 6.6%.
- Boosted by Resources (up 25.5%) followed by Industrials (up 1.3%), Financials were in the red (down 1.9%).
- Small-caps (up 0.9%) a modest gain, outperformed by Mid-caps (up 4.3%), while Large-caps (up 7.9%) won out the month.
- SA Property markets were down for the month of September, with the ALPI down 1.0%, while the S&P SA REIT index lost 0.8%.
- SA Nominal Bonds (up 3.4%) benefited from global appetite for EM bonds, while Inflation-Linked Bonds ticked up by 2.8%.
- Developed Market Equities performed well in September but were outpaced by Emerging Market Equities which posted strong gains. The MSCI World Index gained 3.3% in USD while the MSCI Emerging Market Index (up 7.2%) soared higher.
- The Rand continued to strengthen relative to most major currencies in September. Relative to the US Dollar (Rand appreciated 2.5%), the Euro (Rand appreciated 2.1%) and the Pound Sterling (Rand appreciated 2.1%).
- Platinum (up 16.0%) continued its bullish trend up, followed by Gold (up 10.6%), while Brent Crude (down 1.6%).
MONTHLY RETURNS:
