PrimeXBT insights: can the SA40’s record run continue?

The SA 40 Index (SA40) — the leading SA stock index tracking the performance of the 40 largest JSE-listed companies — rose to fresh record highs in May, booking gains of 4% over the past month and 12% gains since the start of 2025.

It has outperformed the US stock market; the S&P 500 has only just broken even for the year, and the Dow Jones remains in the red year to date. 

This article examines the factors that have driven the SA40 to record highs, discusses whether there is potential for further gains, and explains how traders can access this index and other global markets with PrimeXBT, a regulated multi-asset broker that offers SA40 trading through both MetaTrader 5 (MT5) and its proprietary platform. 

Miners drive gains

The SA40 is heavily weighted towards mining and resource companies. Miners are the dominant sector on the index, with Gold Fields, AngloGold Ashanti and BHP among the big multinational names listed. 

Miners, particularly gold miners, have been a key driving force, propelling the SA40 to record levels. An index of South African mining companies jumped over 50% from January to April as gold prices rose to $3,500 (about R62,380), a record level, last month.

More recently, gold prices have fallen from this record high as the US-China trade war de-escalated. However, rising concerns over the mounting US debt pile and persistent central bank buying of the safe-haven metal could support gold higher over the longer term. 

Should gold and other commodities remain in demand, this will continue to boost profits and share prices in these heavyweight mining firms. 

Interest rates locally and globally matter

Interest rates are also a key driver of stock markets. Lower interest rates mean reduced borrowing costs, which support business investment and consumer spending and often help push stock indices higher. 

However, there are rising concerns among South African fund managers that interest rates could remain higher for longer. These fears have driven fund managers to reduce their exposure to local equities even as the latest inflation data showed that inflation remained within the South African Reserve Bank’s 3% to 6% target. Inflation rose to 2.8% year over year in April, up from 2.7% in March. 

A recent survey by the Bank of America showed that just 28% of South African fund managers were overweight domestic equities in May, down from 45% in April, marking the weakest level in almost two years. This reflects a significant shift in risk appetite, with managers preferring to sit on the sidelines for now owing to subdued economic data and uncertainty surrounding policy direction. 

In the same survey, 36% of managers expect the stock market to rise over the coming six months, which is down significantly from 60% in March. 

This change in stance comes as 17% of managers expect a rate cut over the coming 12 months, down from 30% in April. This more hawkish outlook is also reflected in inflation expectations, with 57% seeing inflation significantly higher over the coming 12 months. 

The Federal Reserve 

The outlook for US interest rates is also important when assessing factors driving the SA40. A more accommodative Federal Reserve can increase risk appetite for emerging market assets such as South African stocks.

While the Federal Reserve reduced rates by 100 basis points in the second half of 2024, the central bank has adopted a patient stance in 2025. Given the uncertainty surrounding the economic impact of Trump’s trade tariffs, the Federal Reserve has not cut rates this year and may hold off on reducing rates until the second half of 2025. As a result, demand for riskier assets such as SA40 could be limited. 

Fiscal and political stability 

Signs of fiscal discipline can boost investor confidence and attract foreign capital inflows.

The third revision of SA’s budget has proved to be beneficial to stocks. The National Treasury walked back plans to raise VAT after struggling to reach an agreement within its governing alliance. This move should help contain inflation and support consumer spending, which is good news for retailers and manufacturers, at least for now. That said, growth forecasts were also revised lower to 1.4% from 1.9% estimated in March, a less encouraging signal. 

Can the SA40’s record run continue?

The SA40’s impressive rise comes amid a strong performance from mining companies and record-high gold prices. However, the outlook is less certain. Near-term concerns over domestic interest rates, cautious sentiment among local fund managers, and global uncertainties, particularly regarding US monetary policy, could limit the upside. However, stronger gold prices could underpin the index over the longer term.

Trading SA40 with PrimeXBT 

The SA40 has risen to record highs, driven by strong mining stocks and record-high gold prices. Concerns over domestic interest rates, cautious local investors, and global uncertainties can create potential trading opportunities on the SA40 both near and long term. 

PrimeXBT offers a powerful and user-friendly platform for traders looking to trade the SA40 index alongside a wide range of global markets. With multi-asset access — including CFDs on stocks, indices, forex, commodities, and cryptocurrencies — traders can easily diversify their portfolios.

PrimeXBT supports both MT5 for advanced technical analysis, as well as its own user-friendly native platform, all in one integrated innovative trading solution.

As a trusted broker, regulated by the Financial Sector Conduct Authority, PrimeXBT provides greater transparency and client fund protection, boosting confidence among investors. Traders benefit from competitive fees, and tight spreads for cost-effective trading.

Additional features, such as risk management tools, and local payment options, add to the trading experience, making PrimeXBT one of the top choices for both new and experienced traders seeking exposure to the SA40 and other global markets. 

Start trading with PrimeXBT SA.

This article was sponsored by PrimeXBT.

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