Alan Wood, Head: Investment Consulting at Simeka Consultants and Actuaries

For Simeka’s full Markets at a Glance, showing performance statistics of the various indices to 30 June 2026, click here.

Global:

• Global equity markets were resilient during the month despite increased volatility. Following the ceasefire between Israel, the US and Iran, investor sentiment improved rapidly, helping major markets recover from earlier weakness and driving several global indices back towards record highs. Nevertheless, the MSCI World Index declined by 0.7% (USD) over the month, while Emerging Markets fell 1.7% (USD).

• Technology shares were the primary source of weakness during the month after leading global markets higher for much of the past two years. Investors took profits and reassessed valuations following the sector’s exceptional gains, resulting in a pullback in several large AI-related companies.

• Recent volatility in technology shares suggest growing investor caution around whether future earnings can support current price levels. While the long-term AI theme remains compelling, investors are becoming more selective as companies face increasing pressure to convert AI investment into sustainable profits.

• Despite the softer month, global equity performance remains strong over longer periods. The MSCI World Index returned 21.8% over the past year, while Emerging Markets delivered an impressive 40.9%, supported by robust earnings growth and continued investor appetite for AI-related opportunities.

• Oil prices declined sharply from approximately US$91 to US$73 per barrel (-19.9%) as geopolitical tensions eased and concerns around supply disruptions through the Strait of Hormuz subsided. Lower oil prices are expected to support the global inflation outlook.

• Gold prices retreated by 11.4% over the month as investors reduced exposure to traditional safe-haven assets following the de-escalation of geopolitical risks and a stronger US dollar.

• Inflation remains a key focus for investors and central banks. In the US, inflation increased to 4.2% (from 3.8%), remaining above the Federal Reserve’s target and reinforcing expectations that interest rates may remain elevated for longer.

• Central banks remained cautious. The European Central Bank and Bank of Japan both increased rates by 25 basis points, while the US Federal Reserve left rates unchanged at 3.50%-3.75%, maintaining a firm stance on inflation.

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• AI-related investment opportunities continue to attract significant capital flows. Recent high-profile listings and anticipated future IPOs continue to reinforce the view that AI remains one of the most important long-term growth themes for global markets.

Local (South Africa):

• South African markets underperformed their global counterparts during the month. The FTSE/JSE All Share Index declined by 3.7%, primarily due to weakness in the resource sector, while the FTSE/JSE All Bond Index returned 1.5% and listed property was the standout performer with a gain of 3.7%.

• South African equities have generally lagged global markets this year. While global shares have benefited from improving risk sentiment, easing geopolitical concerns and continued AI-driven growth, the local market has been held back by subdued economic growth, resource sector weakness and ongoing domestic challenges.

• Over the past year, local bonds have remained the strongest-performing major domestic asset class, returning 21.5%, compared to 18.4% from local equities. By comparison, the MSCI World Index returned 12.8% in rand terms, partly reflecting the impact of rand strength over the period.

• Economic growth remains modest but showed slight improvement during the first quarter of 2026. South African GDP expanded by 0.5%, ahead of expectations of 0.3% and slightly higher than the previous quarter’s 0.4% growth rate.

• Inflation edged higher to 4.5% (from 4.0%), largely due to higher fuel prices. However, the recent decline in global oil prices may help ease inflationary pressures over the coming months, with inflation forecast to moderate towards 3.6% by year-end.

• Fuel levy relief is scheduled to fall away in July. However, lower oil prices should provide a partial offset and limit the impact on consumers.

• The rand weakened modestly by around 1.0%, moving from approximately R16.22/USD to R16.39/USD, largely reflecting broader US dollar strength.

Key takeaway:

Global markets faced a modest decline during June despite an improvement in risk sentiment later in the month. Technology shares experienced a pullback following an extended period of outperformance, although longer-term returns remain strong. In contrast, South African equities continue to lag global markets in 2026, with resource sector weakness and a subdued domestic growth environment weighing on investor sentiment.

ENDS