Monthly Market | August 2026
International
The first half of the year saw strong equity gains across many markets, only to be disrupted by the US-Israeli attacks on Iran and subsequent oil price surge. The main reason was the massive capital spending boom related to artificial intelligence (AI). the last time we saw such a capex boom was probably when the railways were built in the 19th century. The railway mania was economically transformative, but financially ruinous for many investors who thought it would make them rich. Mostly, only those who bought railway securities at a discount after the crash (the biggest one was in 1873) made money. Everyone can see that AI will change how the economy functions. What they can’t see clearly is who the ultimate winners and losers will be, and what users will be prepared to pay for it. Concerns are that the huge AI companies might be spending too much on capex while their cashflow is under pressure. If the growth in earnings does not justify this tendency, these large AI company stocks might be in for a bumpy ride.
Hyperscalers' free cash flow and capital expenditure
The fragile ceasefire between the United States (US) and Iran collapsed in July as strikes resumed. Regional escalation swiftly spread to a second vital chokepoint, the Bab el-Mandeb Strait, where Iran-aligned Houthi forces declared a naval blockade of Saudi Arabia, targeting tankers and energy infrastructure along the Red Sea. The dual disruption temporarily propelled Brent crude oil prices past US$100 a barrel. American public support is meanwhile crumbling. A Reuters/Ipsos poll, conducted between 10 and 12 July, showed that 79% of respondents expect a protracted conflict, only 37% endorse the strikes, and half judge the war as not worth the costs incurred. US President Donald Trump’s approval remains pinned near second-term lows. Economic data brought little cheer during the month. Though June inflation eased to 3.5%, lingering energy risks and fresh tariffs on 60 trading partners compound economic uncertainty.
Global borrowing costs are hitting 20-year highs as governments continue to spend heavily and take on massive debt. With oil prices often staying above $90 a barrel and central banks keeping interest rates high, rising interest rates are weighing on stock markets worldwide and making loans more expensive for businesses and consumers alike.
Gold prices have leapt to near three-month highs as investors rush to protect their wealth against America’s ballooning national debt, after a surprise move by the US Treasury to buy back its own long-term bonds to artificially lower government borrowing costs has spooked global markets. This has brought “dollar debasement”, where investors worry the US currency will lose its purchasing power. A reversion to a huge demand for safe-haven assets such as gold happened – a trend that affects South Africa’s mining sector. The gold price rose from $4 000 per ounce to $4 700 during the last month, before pulling back yet again.
Gold | one month
The bond buyback programme is designed to limit/cap the rise in long term US bond yields, but these measures don’t remove investor’s concerns around
US Inflation
US Fiscal Debt
US monetary Policy
Ongoing Middle East Tension.
Bessent says Treasury buyback operation could be more than $4 billion
Compared to other countries, as well as other emerging economies, South Africa has a low level of government debt, as is visible from the next table.
Countries with the most government debt
The Ebola outbreak in the Democratic Republic of Congo is now the deadliest in its history, according to public health officials. A total of 2 325 people has been killed by the virus since the outbreak was declared on 15 May, surpassing the death toll of the country's 2018-2020 outbreak. The outbreak was already the fastest growing on record, UN humanitarian chief Tom Fletcher said, warning that "the epidemic is killing someone every 30 minutes". There is currently no approved vaccine available for the Bundibugyo species that has caused the current epidemic. However, several are in development, including one based on technology used to develop the AstraZeneca Covid-19 vaccine. A new strain of the rare Bundibugyo Ebola virus is behind the ongoing outbreak in the Democratic Republic of Congo (DRC), suggesting it resulted from a fresh animal-to-human transmission, a study published in Nature Medicine found. The animal source remains unknown.
There is currently no clear breakthrough toward peace in the Russia Ukraine war. The war is still largely a grinding contest on the ground, combined with an increasingly intense long-range drone/missile campaign. There is no lasting ceasefire, and recent reporting indicates Moscow is still unwilling to make the concessions Kyiv considers necessary for a meaningful agreement. The central disputes remain territory—especially the Donbas—and Ukraine's future security guarantees. Western support is still crucial. Ukraine is pressing for more air-defence interceptors, while European governments are again discussing ways to use frozen Russian assets to help finance Ukraine.
Russia's invasion of the Donbas
Despite the blockade of Hormuz, the oil price has not shot back up to over $100 per barrel. The world is finding ways around Hormuz, and the oil market is absorbing the disruption through a combination of alternative routes, lower demand, inventories, rerouting of cargoes, and expectations that the blockage will eventually ease. Saudi Arabia and the UAE can bypass Hormuz. Saudi Arabia can send crude westward through its East-West pipeline to Yanbu on the Red Sea, avoiding Hormuz while The UAE can send crude through its Abu Dhabi pipeline to Fujairah, outside the Strait. But that is roughly only a quarter of global seaborne oil trade.
China has been buying less crude than expected with crude imports that have fallen by roughly 400 million barrels versus last year. Oil prices are ultimately determined by the balance between available supply and demand, not simply by how much oil normally passes through a particular geographical chokepoint. If Hormuz is expected to remain completely closed for years, the impact would be more severe with oil prices surging. However, markets are expecting the strait to open somewhere. So, traders don't want to pay a huge premium for oil that might be much easier to obtain a few weeks or months from now. The UAE is planning another 1.5 million barrel/day pipeline to Fujairah, while Iraq is looking at expanding routes through Turkey and developing routes toward Syria and Jordan. In other words, Iran's attempt to use Hormuz as leverage is encouraging Gulf producers to make themselves less dependent on Hormuz.
The $87 Brent isn’t "low" in historical terms. The market is still charging a substantial geopolitical risk premium. It's just not charging the enormous premium that would occur if traders believed 20 million barrels/day would simply disappear indefinitely.
Brent crude oil | one year
South Africa
The unemployment rate rose to 33.6% in the second quarter of 2026 from 32.7% in the first quarter, with community and social services, mining, agriculture and manufacturing shedding the most jobs. Agriculture has been a bright spot in South Africa’s latest employment figures, despite a slight decline in jobs during the second quarter. Statistics South Africa’s Quarterly Labour Force Survey shows the sector employed about 944 000 people, down 1.6% from the first quarter. However, agriculture added 39 000 jobs over the past year, an increase of 4.3%, making it one of only four industries to record year-on-year employment growth.
While a key determinant of the inflation path remains energy prices, there are signs of broadening price pressures, which point to upward risks and a slower return to the SARB’s inflation target. All major categories, other than retail sales, will record a contraction compared with the previous quarter. Therefore, it is left to Agriculture, Finance, and Government to grow at a healthy pace to avoid an overall GDP contraction. We expect the economy to grow at a faster pace in the second half of the year and next year, as structural reforms continue, albeit at a slow pace. The base case remains for a further 25bps to 50bps of hikes in the cycle, but it seems that it will remain on hold for a more prolonged period, as inflation could remain above the target for an extended period, putting upward pressure on inflation expectations.
President Cyril Ramaphosa officially launched South Africa’s Electronic Travel Authorisation (ETA) at OR Tambo International Airport, marking a major step in the country’s digital immigration overhaul. He also said the system could contribute to addressing the country’s unemployment crisis by supporting tourism and investment while making South Africa a more accessible destination for international visitors.
The ANC wants municipalities to be governed by single parties after November’s local government elections, blaming coalitions for worsening service delivery. The ANC party is targeting outright victories. However, recent polling suggests this is unlikely in most metros. The Social Research Foundation puts ANC support nationally at 34%, compared with 27% for the DA, 15% for MK and 7% for the EFF. In Johannesburg, the ANC trails the DA 18% to 42%, while it ranks third in eThekwini. Tshwane is its strongest metro, but support remains below 35%. Meanwhile, 65% of voters support continued ANC-DA cooperation in hung councils.
Meanwhile, the DA has placed service delivery, job creation, clean governance and functional municipalities at the centre of its manifesto for November’s local government elections. Furthermore, the DA is preparing to lay criminal charges against 10 municipal managers, accusing them of years of financial mismanagement, weak controls and poor service delivery. DA parliamentary leader, George Michalakis, said the officials were identified through adverse Auditor-General findings and repeated failures to meet financial accountability requirements.
According to a July poll by The Common Sense and the Social Research Foundation, billionaire businessman Patrice Motsepe remains the favourite among the public and ANC supporters to succeed Cyril Ramaphosa as ANC president. When asked who they would prefer as the party’s next leader, 37% chose Motsepe, followed by ANC secretary-general Fikile Mbalula on 17% and deputy president Paul Mashatile on 10%.
Transport Minister Barbara Creecy has announced a recovery plan for the Port of Cape Town ahead of the summer fruit export season, after more than R4 billion in losses last year. The plan includes transferring workers from Gqeberha and Durban, adjusting leave schedules, buying new equipment and creating a stakeholder forum to coordinate peak-season operations. About 80% of South Africa’s deciduous fruit exports, including apples, pears, peaches and grapes, pass through Cape Town between November and April.
The leaders of the two major GNU parties set aside their differences to put up a united front to woo infrastructure investors and partners at the Sustainable Infrastructure Development Symposium South Africa. Ramaphosa and Hill-Lewis agree that global and local capital is abundant, but the failure to properly prepare and package projects prevents this capital from flowing. Most striking is the absolute consensus that public infrastructure spend acts as an immediate stimulant for private sector job growth, manufacturing and technical capacity building. If this narrative priority can flow from the party leaders and into their mayoral candidates, then South Africa is about to experience unprecedented growth and prosperity. But the tension between the two parties fighting an election is the problem – the country never knows what to expect from its leaders.
The Public Protector says the National Student Financial Aid Scheme (NSFAS) has failed to fulfil its mandate, after more than 40,000 students at 76 higher education institutions were improperly funded to an estimated value of R5.1-billion. More than R2-billion has been recovered.
South Africa’s citrus industry is celebrating a breakthrough nearly 10 years in the making after India agreed to allow additional treatment options for fresh citrus imports. The deal could open access to a market of nearly 1.5 billion people.
Snippets from the market
Meta has been ordered by a New Mexico state court to pay $567 million towards a teen mental health fund and to alter how its platforms function. The decision follows a ruling that the company was responsible for harming children’s wellbeing through addictive design and failing to protect minors from sexual exploitation on its platforms.
Former Passenger Rail Agency of South Africa boss Lucky Montana, along with his alleged corruptors and their enablers, could be facing charges for their alleged crimes.
An earthquake in Colombia has killed at least 111 people. The 7.4 magnitude earthquake occurred in the western part of the country, just days after Abelardo De La Espriella was sworn in as president.
Both the US and Iran have demanded compensation for damages in the war, sending oil prices 5% higher and dimming any hope of an agreement anytime soon. There are currently no talks underway, with Tehran accusing Washington of violating the terms of an interim deal.
Electricity and Energy Minister Kgosientsho Ramokgopa led a high-level delegation to Beijing to attract Chinese investment in South Africa’s electricity transmission network and new generation projects. The visit follows cabinet’s approval of key electricity market reforms, including a new pricing policy.
The Department of Employment and Labour has introduced legislation to regulate the employment of foreign nationals and empower the minister to issue labour migration regulations.
The City of Cape Town escalated its battle for greater policing powers by formally declaring an intergovernmental dispute over the Metro Police’s lack of investigative powers. The City declared the dispute with Acting Police Minister Firoz Cachalia following the government's refusal to grant Metro Police officers investigative authority.
The Electoral Commission has recorded more than 290 000 first-time voter registrations during its final registration drive.
Former president Jacob Zuma has reshuffled the MK Party leadership, appointing his son, Duduzane Zuma, as the party’s first deputy president with immediate effect. What a family business…
The DA will approach the Western Cape High Court to challenge the appointment and salary increase of parliament’s Secretary, Xolile George, who received a 70% pay rise to R4.4 million within months of taking office. DA parliamentary leader George Michalakis said parliament had been misled over the appointment process and described the salary increase as unlawful and irregular.
South Africa's private sector returned to modest growth in July as easing inflation helped lift business activity, according to S&P Global's latest Purchasing Managers' Index (PMI). The PMI edged up to 50.3, signalling a slight improvement in operating conditions after two months of contraction, with readings above 50 indicating growth.
South Africa is not growing as fast as other emerging markets despite adopting the right macro-economic policies because of years of state capture that devastated capacity in the national government and state enterprises, and that are now evident in municipal failures, says South African Reserve Bank governor Lesetja Kganyago.
And on the same note… South Africa remains on course to stabilise public debt and maintain primary budget surpluses, but failing municipalities threaten faster economic growth, National Treasury director-general Duncan Pieterse says.
South Africa is moving to strengthen oversight of cross-border cryptocurrency transactions through a proposed new regulatory framework. The National Treasury and the South African Reserve Bank (SARB) have published a draft crypto-asset manual for public comment, outlining the country’s first comprehensive rules governing cross-border crypto transactions.
South Africa’s citrus exports for 2026 are expected to be lower than initially forecast after floods in the Western and Eastern Cape damaged some crops, while the war between the US and Iran has made supplying the fruit to the Middle East difficult.
The National Treasury plans to apportion R10 billion to the Equalisation Fund to help counter market volatility in the price of fuel. Minister of Finance Enoch Godongwana has tabled a special appropriation bill in parliament to make provision for the transfer from the National Revenue Fund to the Central Energy Fund.
Parts of the southwestern Western Cape experienced their driest July on record, raising concerns as El Niño is expected to intensify in the coming months.
Australian energy company Kinetico Energy plans to develop dozens of natural gas wells in Mpumalanga, targeting industrial customers and at least one nearby power station. The Perth-based firm hopes to begin commercial gas production before the end of 2027, following what it describes as a world-class gas discovery in southern Mpumalanga.
Artificial intelligence is transforming routine sleep studies into powerful tools for predicting serious health risks beyond obstructive sleep apnoea. Researchers analysed more than 10 000 overnight sleep studies, using AI to detect hidden physiological patterns often ignored in standard assessments.
Chilling allegations about how corrupt police officers have sided with tow-trucking counterparts involved in turf wars and the illicit drug trade have emerged at the Madlanga Commission. A police watchdog boss also alleged at the inquiry that officers meant to crack down on cash-in-transit criminals carry out extrajudicial killings, which he says surged in KwaZulu-Natal a few years ago.
South Africa’s National Water Action Plan is facing criticism over whether it can deliver the improvements promised by government. Water activist Dr Ferrial Adam has described it as uninspiring, arguing that it lacks clear deadlines, budgets and detailed implementation strategies.
Texas biotechnology company Colossal Biosciences is seeking to bring the extinct South African blue buck back to life, potentially creating a new model for conservation driven by genetics and venture capital. The species disappeared from the Cape about 200 years ago. Colossal plans to edit the genome of a close living relative, the roan antelope, and implant embryos into roan antelope surrogates.
5 million young people in SA are unemployed with the youth unemployment rate now at 47.4%.
The US has announced targeted sanctions against the International Criminal Court’s president and a senior attorney. Current sitting president, Japanese judge Tomoko Akane, and Abdoulaye Seye, a Senegalese senior trial lawyer, were both sanctioned, according to Secretary of State Marco Rubio. In other words, the international legal order is under attack by the US.
The North American trade war is escalating after the US hit Canada with 50% tariffs on a wide range of goods, prompting Canada to immediately strike back with matching taxes on American steel, dairy and agricultural equipment. The sudden breakdown of relations between two of the world’s most integrated economies threatens to disrupt global supply chains and inflict significant financial pain on consumers and businesses across that continent.
Southern African leaders have backed South Africa’s call to put migration on the regional agenda, urging coordinated dialogue to address its drivers following anti-immigrant protests and attacks. The issue was raised at the 46th SADC Heads of State and Government Summit in Durban, where President Cyril Ramaphosa was elected chair of the 16-member bloc for the next year.
Five people have been arrested after a multi-agency operation uncovered a crystal meth manufacturing laboratory on a farm near Musina, Limpopo. The Hawks said drugs, laboratory equipment valued at an estimated R600 million and an undisclosed amount of cash were seized following a two-month intelligence-driven investigation.
Home Affairs Minister Leon Schreiber says the department is on track to expand its digital partnership with banks to as many as 750 branches during the 2026/27 financial year, potentially adding 340 outlets.
President Cyril Ramaphosa has formally objected to advocate Thandazani Madonsela SC’s proposed appointment as chief evidence leader in the impeachment inquiry, citing a potential conflict of interest.
The DA has removed MP Mark Burke from parliament’s finance committee and the party’s finance cluster while a company of which he is a beneficiary is investigated by the South African Reserve Bank.
The South African Post Office is seeking a High Court order to end its business rescue process, saying the intervention has stabilised its finances and improved operations.
Cape Town has entered a drought-caution phase following record below-average rainfall, although major dams remain about 78% full. The city says there is no immediate emergency but warns that the risk of short- to medium-term water restrictions has increased.
More than 375 000 plants were seized in the first six months of 2026 in just 26 anti-poaching cases, highlighting the growing scale of illicit plant trafficking.
Zambia's President Hakainde Hichilema has been re-elected for a second term, but the opposition leader put in an unexpectedly strong showing, capitalising on public frustration with lingering hardships despite an economic turnaround.
Norwegian energy giant Equinor has joined Chevron in Namibia’s growing offshore oil exploration drive, acquiring a 17.4% stake in an Orange Basin exploration licence from Chevron’s Harmattan Energy. The deal highlights rising international interest in Namibia’s potential to become a major new oil province.
Dolly Parton, the queen of country rock, has died aged 80.
Parents in Gaza have been told to stop their kids flying kites, following Israeli threats of retaliation. Incendiary kites and balloons were flown over the border in 2018, causing widespread fires. If kite-flying children threaten Israeli minds, 2026 is set to remain a violent one for Palestinians.
Meta has agreed to a landmark legal settlement, opening a massive new front in the global fight to hold social media platforms accountable for harm to young people. The agreement is expected to set a major precedent for pending lawsuits worldwide. Meta is accused of designing Facebook and Instagram to be addictive to young users. The lawsuit, brought by 29 states, also alleges Meta violated federal child privacy laws by using children’s data without parental consent to train machine learning and AI models.
President Donald Trump has submitted a multibillion-dollar civil nuclear energy pact with Saudi Arabia to Congress, conditioning the 30-year agreement on Riyadh normalising diplomatic relations with Israel under the Abraham Accords. If approved, the deal would allow US firms to export advanced nuclear technology and AP1000 reactors, though non-proliferation advocates warn the lack of strict limits on uranium enrichment poses significant geopolitical and security concerns.
The death toll continues to rise with more than 1,000 people reported missing following catastrophic Himalayan flash floods across Nepal and China. Search-and-rescue teams are struggling through submerged terrain to reach isolated mountain villages. Police said they expected the death toll to rise beyond 270.
A new report commissioned by the Centre for Development and Enterprise (CDE) has found that Johannesburg is effectively insolvent, with its accounts painting a misleading picture of its finances.
National Assembly Speaker Thoko Didiza has survived an EFF-led motion of no confidence after MPs voted overwhelmingly against her removal on Wednesday. The motion was defeated by 282 votes to 101, falling short of the majority needed to oust her.
The Special Tribunal has ordered Minenhle Makhanya, the architect and principal agent responsible for the security upgrades at former president Jacob Zuma’s Nkandla residence, to repay the state R147.3 million after finding that his appointment and conduct during the project were unlawful.
The ANC has postponed announcing its official mayoral candidates until September, despite the 4 November local government elections being just over two months away. The party has instead released a shortlist of 42 potential candidates for the country’s eight metropolitan municipalities. Secretary-general Fikile Mbalula says the delay is aimed at preventing internal competition and keeping the focus on the ANC’s campaign rather than individuals.
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