The mining stocks that made the JSE rich are now sinking it

South Africa's mining stocks, once the engine behind a record rally, have flipped into the JSE's biggest drag, pushing the All Share Index to a 3.6% quarterly decline — its worst in nearly three years. Precious-metal prices have slumped since the Iran war as a hawkish Fed strengthened the dollar, hammering heavyweights like Gold Fields and AngloGold Ashanti. Despite this, valuations look increasingly attractive relative to emerging-market peers, and fund managers remain broadly constructive on the market even as foreign inflows dry up and commodity optimism evaporates..By Khuleko Siwele and Mpho Hlakudi.The precious-metals miners that propelled South African stocks to a record have become a millstone, dragging the benchmark index toward its worst quarterly slump in more than two years.The FTSE/JSE All Share Index is down 3.3% since the end of March, the most since the three months through March 2024, compared with a gain of 24% for the MSCI emerging-markets equity gauge. The metals and mining sub-index, which accounts for more than a quarter of the Johannesburg benchmark’s weighting, has plunged 24% in the period.Precious-metal prices have tumbled from all-time highs since the start of the Iran war as a hawkish-leaning Federal Reserve boosted the dollar. That’s weighed on South African miners after a rally that helped push the broad index up 78% in dollar terms between the start of 2024 and the end of February, outperforming both the MSCI emerging-market and developed-world stock gauges.“Precious metals may struggle to regain momentum given a strong dollar and a still-hawkish Fed,” said Derrick Irwin, a senior portfolio manager at Allspring Global Investments. “Capital is currently being pulled toward artificial intelligence-related opportunities in other emerging markets and the US, which has left South Africa somewhat out of favor.”.The worst laggards in terms of index points this quarter have been mining heavyweights Gold Fields Ltd., down 27%, AngloGold Ashanti Plc (-19%) and Valterra Platinum Ltd. (-20%), according to data compiled by Bloomberg. Mobile-phone provider MTN Group Ltd. and lenders FirstRand Ltd. and Capitec Bank Holdings Ltd. were the biggest positive contributors.South African stocks have been getting cheaper relative to their emerging-market peers for nearly two years, despite this quarter’s underperformance. The FSE/JSE All Share Index’s valuation, based on estimated 12-month forward earnings, trades 19% below that of the MSCI Emerging Markets Index, compared with an 11% discount in September 2024. For some investors, that’s an opportunity..“Valuations are now attractive for long-term investors” though the near-term outlook “remains challenging,” said Allspring’s Irwin. He has been adding to positions where he sees long-term value, such as companies that use technology to serve lower-income consumers or that are expanding successfully into other African markets.Nine out of 10 respondents in a Bank of America Corp. survey of South African fund managers conducted earlier this month saw more buys than sells in market — the highest share since 2009. However, just half of them are outright bullish on the broad index, far below the 88% before the outbreak of the Iran war. Not one was upbeat about the outlook for commodity stocks..“Commodity bulls have disappeared as quickly as they came,” BofA strategist Andreas Bruckner said in a report. Almost two-thirds of respondents favored sitting tight rather than adding to current positions, he wrote..Read more:.The gold did not run out — the owners did: Duarte da Silva's devastating case against SA's mining abandonment.Foreign inflows into South African stocks, meanwhile, have dried up, despite an improving fiscal and economic backdrop. South Africa’s equity market has seen outflows in three of the last four months, according to a separate BofA report, citing EPFR Global data.“Underlying macro data in South Africa is good or even slightly better than expected,” said Marc Bindschaedler, a portfolio manager at Vontobel Asset Management in Zurich. “Nice music, but no-one listens to it anymore.”.© 2026 Bloomberg L.P..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

The mining stocks that made the JSE rich are now sinking it

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