Monthly Market | May 2026

Global

Iran and the US have reached a tentative agreement to extend an active ceasefire, say sources. But final approval has not been given by President Donald Trump or by the leadership in Tehran.

Iran said on June 1 that no formal nuclear negotiations are currently underway, despite ongoing indirect diplomatic contacts. Tehran accused Washington of sending mixed signals and said trust has been undermined by recent U.S. military actions and Israeli operations in Lebanon.  The two sides are still discussing a broader framework that would combine limits on Iran's nuclear activities, sanctions relief for Iran, security arrangements in the Gulf, and keeping the Strait of Hormuz open to international shipping.

Reuters reports that Iran is insisting any broader agreement must also address regional conflicts, particularly a ceasefire in Lebanon, while continuing to demand the release of frozen Iranian assets.

On June 1, Israeli Prime Minister Benjamin Netanyahu ordered new strikes on Hezbollah-linked targets in the southern suburbs of Beirut, particularly the Dahiyeh area, a Hezbollah stronghold. Residents were reported fleeing after warnings of possible attacks.  Israel said the attacks were a response to continued Hezbollah rocket and drone fire into northern Israel and accused Hezbollah of repeatedly violating ceasefire arrangements.  Israeli ground forces have also expanded operations in southern Lebanon. Israeli troops recently captured the strategic Beaufort Castle area and moved deeper into territory north of the Litani River.

The price of Brent Crude follows all possible indicators, and the chance that the Strait of Hormuz can open had an immediate positive impact on the price of brent crude oil.

Brent crude oil

Trading Economics

Even with a lot of uncertainty, the longer-term outlook on equities remains bullish.  The combination of elevated fiscal spending, accelerating capital expenditure, a weaker US dollar, and the potential de‑escalation of geopolitical tensions presents a constructive backdrop for global equity earnings. This environment is particularly supportive for more cyclical and externally leveraged regions such as Emerging Markets, China, and South Africa.

Against this backdrop, one should continue to maintain a positive stance on growth assets, particularly equities and listed property, where earnings leverage to this improving macro environment remains compelling.  One should therefore guard against emotional reactions to negative newsprint and rather stay focussed on one’s long-term strategies.

President Donald Trump and China’s Xi Jinping wrapped up a two-day state visit in May. It has been a show of pomp and business deals, sprinkled with a warning from Xi that mishandling the situation with Taiwan could send relations spiralling.  However, Trump left China empty-handed - his first visit since 2017 and the first by any U.S. president in nine years. No real trade breakthroughs, no Beijing support on Iran and peace talks remain stalled. Markets responded positively to renewed engagement between Washington and Beijing, with signs of easing trade tensions supporting risk assets. The graph below shows the immediate positive reaction of US indices on the easing trade tensions.

NASDAQ 100 and S&P 500 Performance

from 19/05/2025 to 19/05/2026

Fund Focus

In the US, the Magnificent 7 now accounts for roughly 32% of the entire S&P 500. Closer to home, South Africa's FTSE/JSE ALSI tells a similar story with just seven precious metals companies representing approximately 25.6% of the top 25 index constituents. When that much weight sits with so few names, index-tracking portfolios become increasingly exposed to the fortunes - and misfortunes - of a very small group.

Kevin Warsh was confirmed as Federal Reserve Chair, succeeding Jerome Powell, in a 54–45 Senate vote - the most partisan Fed confirmation on record. He takes the helm as inflation intensifies and Trump presses for rate cuts.

The US plans to indict Cuba’s 94-year-old former president Raúl Castro – Fidel’s brother. The case relates to Cuba’s 1996 shootdown of planes that were operated by the humanitarian group Brothers to the Rescue. It’s not like these US plans have any other motives…

The Centers for Disease Control and Prevention has confirmed that one American has tested positive for Ebola in the DRC. While unnamed by authorities, a local mission confirmed that staff member Dr Peter Stafford was exposed while treating patients at Nyankunde Hospital in the DRC.  Scientists at Oxford University are developing a new vaccine that could be ready for clinical trials within two to three months to help tackle the Ebola emergency. The outbreak, centred on the Democratic Republic of Congo, has resulted in more than 900 suspected cases and more than 200 deaths. The rare species of Ebola, known as Bundibugyo, for which there is no proven vaccine, kills around a third of those infected.

At the end of April, futures indicated a decline in oil prices, signalling that markets are expecting some solution to the middle east tensions.  The three-month future was still at $110 per barrel, while the six-month future has dropped to around $85 per barrel.  Still high, but a drop of more than 20%.

Brent crude oil futures

Bloomberg | Apex

South Africa

The social development minister, Sisi Tolashe, who was finally axed by President Cyril Ramaphosa on Thursday after months of scandal, leaves behind an inglorious legacy.  Luxury SUVs meant for the ANC Women’s League were used by two private family members of the minister.

President Cyril Ramaphosa addressed the nation, saying he would not resign and warning that doing so would undermine efforts to rebuild institutions and prosecute corruption.  He has taken the court’s decision on review so effectively kicking the can down the road. The ANC has rallied behind President Cyril Ramaphosa ahead of a special national executive committee meeting to discuss the implications of the Constitutional Court judgement in the Phala Phala matter. ActionSA says it will be filing criminal charges against President Cyril Ramaphosa for allegedly lying about the amount of money stolen from his Limpopo farm in 2020. Recent media reports suggested that the money stolen totalled R15 million and not R10 million as previously stated.

SA unemployment rate rose to 32.7% (from 31.4%) in Q1 2026, with more than 300,000 jobs lost, underscoring the country’s ongoing economic and labour market pressures.

Transnet announced that it has allowed 11 private firms to operate trains on South Africa's five strategic rail corridors as part of government’s drive to boost freight volumes and lift economic growth. The private companies are ARC South Africa, The Railway Corporation, TLD Marine, MENAR, Sharp Logistics, Barberry, Grindrod, Minrail, IRACEMA, Motheo Logistics, and Interlinks. They are expected to introduce an additional 24 million tons of freight capacity to the network, with the potential to scale ⁠to 52 million tons over the next five years.

The rail corridor connecting the economic hubs of Gauteng and Durban is set for a forensic examination to determine the extent of its degradation as the government moves to refurbish the corridor to boost vehicle exports, among other things. To this end, the Industrial Development Corporation, on behalf of Infrastructure South Africa, is looking to private sector service providers to assist in scanning the 1 400 km rail corridor to audit its state of disrepair. The exercise, expected to take about a year, will help investors understand where to prioritise repair investments.

South Africa’s eight seaports, managed by Transnet, handled more than 300 million tonnes in the 2025/2026 financial year – their best performance in 15 years, and an indication of the freight and rail entity’s recovery efforts. Transnet reported a 9% increase in vessel traffic, with a significant contribution by the automotive industry through a surge in car imports from China and India, while it continues to ship thousands of cars to Europe.

SA became the world's leading citrus exporter in 2025, surpassing Spain with 2.9 million tons shipped.  Considering the impact of tariffs and poor port delivery, this feat is even more impressive.

Pick n Pay is launching a quick sale of up to R4.7bn worth of Boxer shares, equal to about 11.5% of Boxer.  The market is wondering if the company is not in bigger trouble than anticipated. The money will help fund Pick ‘n Pay’s turnaround plan, improve flexibility and support the push to get the core Pick n Pay stores business back to cash break-even. Even after the sale, Pick ‘n Pay expects to keep about 54% of Boxer, so Boxer remains a key growth engine for the group.

The government has declared the severe storms in some provinces as a national disaster. Department of Cooperative Governance and Traditional Affairs funds will be unlocked for recovery efforts. The Northwest, Free State, Eastern Cape, Northern Cape, Western Cape and Mpumalanga have been affected by floods, thunderstorms, damaging winds and snowfall in some places.

The KwaZulu-Natal High Court has ordered that Jacob Zuma’s arms deal corruption trial must proceed regardless of any further applications. Judge Nkosinathi Chili found there had been an inordinate delay in the prosecution and ordered the trial to begin on 1 February 2027. Legal experts say the ruling leaves Zuma with virtually no legal avenue to further delay proceedings, with any challenge likely to fail.  However, his age (84) might now be his saving grace.

The National Treasury’s latest Municipal Finance Management Act compliance report says financial management remains subpar in many municipalities, with unauthorised irregular fruitless and wasteful expenditure increasing to R268.13 billion in the 2024/2025 financial year from R264.1 billion previously.

 The Constitutional Court has scrapped the Health Minister’s plans to control where doctors work, confirming a High Court ruling that the “certificate of need” provisions in the National Health Act are irrational, unconstitutional and invalid.  According to Health minister Aaron Motsoaledi, this has no impact on the NHI plans.

The ANC is likely to lose further ground in the upcoming local government elections, with the party’s support likely to be in the 30% to 40% region, according to Fitch affiliate BMI’s latest report. The report said service delivery, particularly water, energy and infrastructure, alongside crime and corruption, will be decisive issues in key battleground metros such as Johannesburg.

South Africa has imposed new steel tariffs – the biggest protectionist move in two decades – to shield the local industry from cheap imports. The International Trade Administration Commission of South Africa concluded its biggest steel review in 20 years, which covered about R67 billion worth of imports. It decided to impose 20% on products such as spades, shovels, timber wedges, hand saws, knives and cutting blades, rods and tubes, which were previously free of tariffs.

Eskom is in exploratory talks with the World Bank over funding for a multibillion-dollar nuclear programme that could be launched within 12 months. The power utility is preparing a request for information covering up to 5 200 megawatts of new capacity. It is proposing 4 800 MW from conventional pressurised water reactors, and 400 MW from small modular reactors (SMRs), with at least half of the SMR capacity earmarked for its coal-to-nuclear strategy.

 The South African Reserve Bank’s (SARB’s) decision to increase the repo rate by 25 basis points to 7% can be viewed as a move to contain inflation and inflation expectations. The sharp rise in inflation to 4% in April, alongside higher services and core inflation, suggests emerging broader price pressures which the SARB reflected in higher core inflation estimates. Given the SARB’s upward revision in its 2026 headline inflation forecast to above the upper end of its 2% to 4% tolerance band and its commitment to a restrictive policy stance to return inflation to the new 3% inflation target, interest rate cuts are off the table for 2026.

South Africa Interest Rate

Trading Economics

Snippets from the market

• Russia and Ukraine have conducted a major prisoner exchange, with each side returning 205 captives following a week of intense neutral-party mediation. The swap represents one of the largest humanitarian breakthroughs in months, providing a rare moment of diplomatic coordination amid the ongoing war.

• Brown Mogotsi may face an uphill battle after the police revealed that the gun allegedly used in a staged assassination attack on his vehicle was also used in a murder and armed robbery case.

• While its own lawyers insisted that the provision to introduce controls over where medical practitioners and nurses could work was crucial for the future implementation of the National Health Insurance, the government on Monday maintained a firm stance on the future of the NHI.

• Santam grew gross written premiums by 9%, but weather claims from floods and Western Cape wildfires cost about R430m.

• Transport Minister Barbara Creecy says government is exploring a new hybrid funding model for the Road Accident Fund.

• The National Assembly’s Chief Whips’ Forum has agreed on the composition of the Section 89 committee that will determine whether there is prima facie evidence to institute impeachment proceedings against President Cyril Ramaphosa over the Phala Phala scandal. The committee will consist of 31 members, with the ANC allocated nine seats on the committee, the DA five, the MK Party three and the EFF two. The remaining 12 seats will be shared among smaller parties.

• Pressure is mounting on South Africa’s agriculture sector, with the likely return of the El Niño climate pattern later this year adding to concerns about rising fuel and fertiliser costs due to global geopolitical tensions. The industry – which accounts for 2.5% to 3% of GDP – has performed well in recent years despite logistics constraints and biological risks.

• The Chery Tiggo 4 was South Africa’s best-selling passenger vehicle in April, outperforming some of the country’s most familiar car brands.

• Power utility Eskom and NYSE-listed grid-scale energy storage company Energy Vault have signed a strategic development agreement to deploy long-duration gravity energy storage systems in South Africa and, eventually, also in the rest of the Southern African Development Community. The first GESS plant will be built at Eskom’s Hendrina power station in Mpumalanga. Eskom says the partnership will accelerate the decarbonisation of Southern Africa’s power sector.

• An independent report into water challenges facing communities in Limpopo that rely on the Middle Letaba Dam has found that more than 75% of the water in the area is used by commercial farmers – a situation it said amounts to a human rights violation for large parts of society struggling to get water.

• The Western Cape was lashed by strong winds and heavy rains with storms claiming at least 10 lives. In total, 26 informal settlements in Cape Town were submerged, with over 10 700 structures damaged, affecting more than 41 000 people.

• The government will begin providing Gilead’s HIV prevention shot, lenacapavir, on 5 June, Health Minister Aaron Motsoaledi announced in his budget speech to parliament. Lenacapavir has been hailed as a potential gamechanger in the fight against HIV, as the twice-yearly injection provides users with almost perfect protection against the virus.

• A wearable skin sensor patch combined with artificial intelligence can monitor reproductive hormones over time to detect subtle fluctuations that might be contributing to patients’ fertility problems.

• The DA pulled off a historic first by winning its first Gauteng township ward, edging the ANC in Evaton West, Emfuleni, right on the edge of Johannesburg next to Orange Farm. While the ANC lost significant ground in Emfuleni, it was business as usual as it posted an emphatic win in Mafikeng (Mmabatho), Northwest.

• The US plans to take in 10 000 more Afrikaner asylum-seekers as their arrivals near the current limit. The State Department has submitted an emergency declaration to Congress, signalling intent to raise the annual asylum limit from 7 500 to 17 500.

• Veteran politician and constitutional negotiator Roelf Meyer presented his credentials to President Donald Trump, making him the new South African ambassador to the US at a time when political relations between the two countries have been frosty.

• The DA has appointed veteran MP and former prosecutor Glynnis Breytenbach as its new chief whip in the National Assembly.

• MPs from across the political spectrum, including the ANC, lamented the chronic underfunding of the South African National Defence Force during the budget vote in the National Assembly.

• The National Consumer Commission says it has referred domestic airline FlySafair to the National Consumer Tribunal for adjudication over allegations of overbooking and overselling flight tickets, and an administrative penalty of 10% of FlySafair’s annual turnover.

• South Africa’s agriculture sector needs a blended state-private insurance scheme to help farmers hit by disasters, Agriculture Minister John Steenhuisen says.

• The severe flooding that has affected citrus-producing areas in the Western Cape and parts of the Eastern Cape has dealt a blow to the sector’s prospects. This after a bumper 2025 season which saw its exports surpass those of global industry giant Spain.

• Mineral Resources Minister Gwede Mantashe once again moved to assure South Africans that the country would not run out of fuel despite geopolitical instability that has caused the fuel price to skyrocket.

• South Africa’s gas industry is calling for a more centralised state role in planning, financing and coordinating gas infrastructure, arguing that market forces alone will not deliver the investment needed to avoid a looming supply shortfall and expand the country’s gas economy.

• The Russian state atomic energy corporation, Rosatom, intends to extract uranium from the arid Kalahari region by pumping sulphuric acid into a transboundary aquifer shared by Namibia, South Africa and Botswana. The Stampriet Artesian Basin is one of the largest aquifers in southern Africa, and the only permanent source of water in one of the driest parts of the sub-continent.

• Cancer-related fatigue, one of the most common and hard-to-treat side effects of the disease and its treatments, can be eased by drugs widely prescribed for attention deficit hyperactivity disorder. Patients who received the brand names Ritalin and Focalin, had significantly improved fatigue scores.

• The government is stepping up cooperation with South Africa’s neighbours to curb undocumented migration as tension over the thorny issue spills beyond domestic politics into regional diplomacy.

• Parliament has called provincial Health Departments to account for the R11 billion they owed the National Health Laboratory Service at end-March, a debt that has hampered the NHLS’s operations at 233 medical testing facilities countrywide.

• Mkhonto weSizwe Party chief whip Mmabatho Mokoena-Zondi has been arrested on fraud charges stemming from allegations that between August 2024 and December 2024, she recruited four individuals into the party as researchers and subsequently demanded that they pay over up to 60% of their salaries under the guise of contributing towards party president Jacob Zuma’s legal fees.

• Credit ratings agency Moody’s revised its outlook on South Africa to positive from stable, citing strengthening fiscal performance and progress on structural reforms. However, it maintained the country’s long-term foreign and local currency issuer ratings at “Ba2”.

• The High Court in Pretoria has granted interim relief to cattle farmers, allowing them to procure and administer imported foot-and-mouth vaccines under strict conditions.

• The Department of Trade, Industry and Competition has submitted a defence of its eligibility for the African Growth & Opportunity Act (AGOA) to the US Trade Department despite its upper-middle-income country status, pushing for a 15-year extension of the duty-free pact.

• South Africa’s agricultural exports rose 11% year on year to R60.30 billion in the first quarter of 2026, supported by higher export volumes and firmer commodity prices despite an uncertain global trade environment and continued domestic logistics constraints.

• South Africa’s vehicle trade deficit with its key Brics partners China and India reached R90 billion last year. The vehicle trade deficit, according to data from the Bureau for Economic Research, is more pronounced with China, with which South Africa ran a deficit of R57.7 billion last year, putting pressure on the government to seek more favourable trade terms with Beijing.

• Eskom is planning to build a solar photovoltaic panel manufacturing facility with the capacity to produce at least 1 gigawatt at one of its sites in Mpumalanga – enough to supply the electricity needs of at least 750 000 homes.

• Eskom has confirmed a mishap at Koeberg Unit 2, which resulted in a turbine rotor being dropped inside one of the giant turbines. The rotor, which was manufactured in France, reportedly weighs 150 tonnes. During the lifting of one of the low-pressure turbines, a crane temporarily stalled, resulting in the mispositioning of the turbine rotor. The rotor was safely recovered, with no significant damage identified.

• Temperature records are being smashed across Europe as parts of the continent swelter in a heat wave that is bringing extreme temperatures alarmingly early in the year (as high as 10-15 degrees Celsius above normal).

• The Dead Sea is rapidly dying, as the impact of human activities and climate change take a heavy toll, shrinking the surface area.

• When measured against 60 emerging economies, SA’s household debt, at 33.8% of GDP (down from 43.5% of GDP in Q1 2008), ranks as the 10th highest.  Debt servicing costs remain manageable at 8.4% of disposable income.

Feel good story

They released 500 giant African spurred tortoises into a barren stretch of the Sahara. Five years later, satellites spotted green where only sand had been. Adult males can weigh more than 100 kilograms. But size alone is not what altered the landscape. The trait that mattered was the animal’s drive to excavate. To escape lethal ground temperatures, spurred tortoises carve burrows 10 to 15 meters below the surface.  Each tunnel lets the tortoise survive the midday heat and the cold nights. It also punches through the sealed soil crust. Once that crust breaks open, rainwater finds a path downward instead of sheeting off the surface. The surrounding soil gains water retention capacity. Moisture stays in the ground longer after each rainfall. A burrow entrance and the loosened soil around it create a pocket of stable microclimate. The tortoise does not carry or spread seeds deliberately. But seeds already lying dormant on the hardened surface, or seeds carried in by wind, find just enough moisture and shelter near the burrow to germinate.

Daily Maverick | 28/05/2026