Goldman Sachs Sees South African Equities Rallying Amid Weakening Dollar, Strong Mining Stocks

Goldman Sachs forecasts a 6.3% increase in the FTSE/JSE Top40 Index over the next year, driven by a weaker dollar and strong mining stocks. The index has already risen 44% in dollar terms in 2025, with gold mining stocks such as Gold Fields and Anglogold Ashanti leading the gains. The bank's bullish view on South African equities is based on a slide in the greenback and a dovish Federal Reserve, allowing the central bank to keep rates low.

Goldman Sachs has projected a 6.3% increase in the FTSE/JSE Top40 Index over the next year, driven by a weaker dollar and robust performance in mining stocks. The index has already surged 44% in dollar terms in 2025, with gold mining stocks such as Gold Fields Ltd. and Anglogold Ashanti Plc leading the gains.

The bank's bullish outlook on South African equities is underpinned by a slide in the greenback and a dovish Federal Reserve, which has enabled the South African central bank to maintain low interest rates. According to Sunil Koul, an emerging market equity strategist at Goldman Sachs, the dollar's continued weakening and the Fed's dovish stance will allow many emerging market central banks, including South Africa's, to ease rates further.

Goldman Sachs upgraded South African equities to "overweight" in August and expects the FTSE/JSE Top40 Index to increase by 6.3% over the next year. The index currently trades at 11.5 times forward earnings, which is a 17% discount to the emerging-markets benchmark.

The rise in gold prices has significantly boosted mining stocks, with Gold Fields Ltd. and Anglogold Ashanti Plc being notable beneficiaries. The slide in the greenback has also allowed the South African central bank to keep rates at their lowest since November 2022, further supporting local shares.