INVESTMENT MARKET UPDATE
DECEMBER 2025
What developments have unfolded in local and global markets throughout the month of DECEMBER?
39 Record Highs
Set by the S&P 500 in 2025. The record is 77 in 1995.
95 Years Old
Warren Buffet officially retired as the year closed out.
231
Consecutive days of no loadshedding in SA.
ADVANTAGE - DECEMBER COMMENTARY:
GLOBAL MARKETS
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🌐 Global Markets: From Acceleration to Rebalancing
Global markets entered December with a noticeably calmer and more cautious tone, a shift from the strong momentum seen in previous months. Investors weren’t reacting to any single shock, but rather to a combination of political tensions, policy uncertainty, and cooling economic momentum that made the backdrop feel more complicated going into year‑end.
A major theme was the rise in geopolitical tension. The US intervention in Venezuela and the escalating conflict in Sudan added new layers of global instability. In Europe, governments continued to wrestle with energy security, rising budget pressures, and ongoing Russia‑Ukraine negotiations. With risks building across multiple regions at once, many investors felt it was safer to slow down and reassess rather than continue chasing returns.
This shift in mood pushed investors toward safe‑haven assets, with gold performing strongly as people looked for stability during uncertain times. Meanwhile, oil prices fell sharply, largely due to weaker global demand and recalibration in supply, which led to rising inventories. Cheaper oil can be positive for consumers, but for markets it often signals deeper concerns about the pace of global growth.
Across the major economic regions, December’s story was less about measurement and more about mood. The US managed a balance of resilience and caution, supported by a Federal Reserve rate cut but held back by political and fiscal worries. Europe saw steady, modest improvement, helped by defensive sectors and calmer energy markets. In Asia, China and Hong Kong continued to struggle with structural economic challenges, while Japan cooled after a strong year, as investors locked in gains and prepared for potentially slower conditions ahead.
Overall, December marked a turning point from enthusiasm to reflection. Instead of focusing on rapid gains, investors shifted to managing risk and watching global developments more closely. Looking into 2026, markets are shaped not by a single storyline, but by many interconnected ones — geopolitics, consumer behaviour, policy direction, and shifting economic momentum. Understanding these broader forces, rather than just index movements, will be key to navigating the months ahead.
Global Market Highlights (Month in USD):
- MSCI World Index: +0.84%
- MSCI Emerging Markets: +3.02%
- S&P 500: -0.1%
- Dow Jones: +0.7%
- NASDAQ: -0.5%
- FTSE 100 (UK): +2.2%
- Shanghai Composite (China): +0.1%
- Hang Seng (Hong Kong): -0.9%
- Nikkei 225 (Japan): -1.05%
- Gold: +2.5%
- Brent Crude: $62.54 per barrel (declined)
Key Themes for Investors:
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Global inflation continued easing, but sticky services inflation meant central banks signaled that rate cuts would be slower and more data‑dependent.
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Global growth remained steady but moderating, with the US, Europe, and China all showing resilience despite policy uncertainty.
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Geopolitical risks — including conflict escalation, energy insecurity, and shifting alliances — continued to drive market volatility across regions, commodities, and currencies.
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Investor sentiment softened as developed‑market equities paused after a strong run, while safe‑haven flows supported gold and government bonds.
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Emerging markets benefited from a weaker US dollar, falling oil prices, and improved capital flows, enhancing relative performance versus developed markets.
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South Africa remained a standout performer thanks to improved fiscal credibility, policy stability, strong commodity prices, and a significantly stronger rand.
Rand / US Dollar:
- In December, the Rand has gained 3.3% against the USD. In November, the Rand gained 1.0% against the USD.
- This compares with the long-term monthly average appreciation of 3.9% and depreciation of -4.2%
Rand / Euro:
- In December, the rand gained 1.8% against the EUR. In November, the rand gained 0.4% against the USD.
- This compares with the long-term monthly average appreciation of 2.8% and depreciation of -3.2%
Rand / British Pound:
- In December, the rand gained 1.9% against the GBP. In November, the rand lost 0.4% against the GBP.
- This compares with the long-term monthly average appreciation of 3.1% and depreciation of -3.1%
SMARTIE BOX IN RANDS:
LOCAL MARKETS
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South African Markets: Fiscal Credibility and Gold Shine Bright
South Africa ended December on a surprisingly strong and upbeat note, standing out at a time when many global markets were turning cautious. The big story was the continued surge in precious metals, which lifted resource companies and helped push the JSE higher. Strong gold and platinum prices meant resource shares once again did the heavy lifting, keeping the local market’s winning streak alive.
Sentiment toward South Africa improved meaningfully as the country benefited from a stronger rand, softer inflation, and renewed confidence following major policy milestones like the FATF grey‑list exit. Investors reacted positively, driving fresh interest into local equities and bonds.
Financial shares also had a standout month, rebounding strongly as expectations grew that the SARB may continue cutting rates in 2026. This added to the sense that South Africa might finally be moving into a more supportive economic cycle.
Not everything was smooth: a few consumer‑focused companies struggled, with Mr Price falling sharply after concerns around an international acquisition. These pockets of weakness highlighted that while markets were strong, parts of the economy remain under pressure.
Overall, December wrapped up as a positive and confidence‑building month for South Africa — driven by strong commodities, a firmer currency, and improving domestic sentiment — giving investors a more optimistic springboard heading into 2026.
2025 Mind of the manager survey results
- The JSE All Share finished the year celebrating, ending December up 4.6%.
- Resources (up 5.7%) continued their impressive growth streak, as Financials (up 7.7%) rocketed higher, and Industrials (up 1.9%) returned modest growth.
- Small-caps (up 2.4%) climbed into the green, as Mid-caps (up 4.5%), and Large-caps (up 4.7%) stole the show.
- SA Property markets lagged equities but still ended in the positive. The ALPI inched up, adding 0.1%, while the S&P SA REIT index reported a 1.4% gain.
- SA Nominal Bonds (up 2.8%) gained, and Inflation-Linked Bonds also bounced (up 2.9%) outperformed by a hair.
- Developed Market Equities reported respectable gains, as the MSCI World Index climbed (up 0.8% in USD) but lagged emerging market equities, as the MSCI Emerging Market Index closed ahead (up 3.0% in USD).
- The Rand strengthened against major currencies. Relative to the US Dollar (Rand appreciated 3.3%), the Euro (Rand appreciated 2.1%) and the Pound Sterling (Rand appreciated 1.8%).
- Gold continued to grow steadily, (up 2.5%) but was overshadowed by Platinum which launched (up 21.3%) higher. Brent Crude (down 3.7%), ending the year much lower.
MONTHLY RETURNS:
