Since the first military strikes on February 28, 2026, the Johannesburg Stock Exchange hasn’t just been “volatile”—it’s been a battlefield. In three short weeks, the ALSI dropped over 14%, marking our worst decline in twenty years. But by May, as we moved into this cycle of shaky truces, the market split in two. We’re seeing a massive gap between the “war winners” and the domestic companies left struggling in the wake.
1. The Heavy Hitters: Energy and Resources
The clear winners are the companies tied to the global energy scramble.
- Sasol (SOL): They’ve been the ultimate hedge. With oil prices doubling this year, Sasol’s synthetic fuel capabilities have made it indispensable, and investors noticed—the share price more than doubled by late April.
- Coal & Gold: Thungela Resources is up over 57% as the world hunts for alternatives to Iranian gas. Meanwhile, Gold Fields and AngloGold Ashanti initially provided that classic safe-haven rally as investors panicked early on.
2. The Laggards: Retail and Banking
While energy is soaring, “SA Inc.” is feeling the heat of a “double-whammy”—surging costs and a consumer base that’s completely tapped out.
- The High Street: Retailers like Mr Price and TFG are being hammered by fuel shocks. When it costs more to move goods and people are choosing between petrol and clothes, discretionary retail is the first to go.
- Banks: Heavyweights like FirstRand and Absa saw major sell-offs in March. The fear is that interest rates will stay high to fight this war-driven inflation, which just increases the risk of people defaulting on their loans.
Why the Market Split?
It comes down to Geopolitical Risk Pricing. Because South Africa is a net oil importer, any threat to the Strait of Hormuz is an immediate red flag for the local economy. Global funds used the JSE as an “early exit” from emerging markets. Paradoxically, the very resources we export became more valuable as global supply chains tightened, creating this strange, divided market.
The Opportunity: Looking for the “Recovery Gap”
As of May 2026, the fragile ceasefire is starting to reverse the “war premium,” and that’s where the real strategy comes in:
- The Banking Bounce: We’ve already seen 6% single-day rallies in the banking index as traders bet on a return to rate cuts.
- Defensive Tech: Naspers and Prosus have been remarkably stable, proving that global tech and AI trends are largely decoupled from Middle Eastern geopolitics.
The Bottom Line: Winning right now isn’t about perfectly timing the market; it’s about balance. The real play is in the “recovery gap”—finding those high-quality domestic stocks that are currently trading at deep discounts because of a panic they didn’t cause.
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