South Africa stocks in sweet spot as gold, rand gain, BofA says

South African stocks’ record 12-month winning streak has further to go thanks to booming metals prices and the firmer rand, according to Bank of America Corp.

The South African benchmark touched a fresh record high Monday, bolstered by gains in gold and silver after the US and Israel attacked Iran. While index pulled back as the session went on, it still outperformed the broader emerging markets gauge on the day.

The country’s market is benefiting from a rare alignment of supportive global and domestic forces, particularly elevated metals prices and expectations of a weaker dollar, said BofA South Africa strategist John Morris.

“We’re in a sweet spot,” he said in an interview. “You don’t often see this combination, and we still have runway.”

The FTSE/JSE Africa All Share Index has surged 44% in the past year, with metals and mining stocks leading the advance. It’s gained each of the last 12 months, the longest such streak in records going back to 1995, and the benchmark’s 7% jump in February was the biggest monthly advance in more than two years.

The commodity cycle could underpin markets for the next 12 to 15 months, said Morris. Gold has soared 86% in the past year while platinum is up 146%.

“It’s the decade for resources; US inflation is elevated,” said Morris. “It feels like the ‘70s.”

The hostilities in the Middle East don’t change his constructive view on the outlook for South Africa, he said, noting that precious metals prices were strong on Monday.

Read: Middle East crisis pressures SA trade, oil and rand
JSE breaks new record in budget week
Gold little changed as US and Iran agree to extend nuclear talks

The rand, which he views as undervalued, may also gain further, helping push bond yields lower and support banks and other domestic sectors, he said. The currency has strengthened about 15% against the dollar in the past year.

High commodities mean a stronger rand, which bolsters South Africa’s domestic companies, said Morris. Financial and industrial shares could deliver meaningful returns as they catch up to miners, he said. Morris said South Africa’s latest budget “just supports the case” for investing in local assets.

While economic growth remains modest and reforms incremental, easing inflation could give the South African Reserve Bank room to cut interest rates, reinforcing the cyclical upswing, he said.

“You won’t get the same outsized returns as last year,” Morris said. “But the path for the market is still higher, with setbacks along the way.”

© 2026 Bloomberg