South Africa’s risky financial markets improved strongly in August 2026.
This was despite the negative and continuous global geopolitical effects of the ongoing war between Russia and Ukraine and the US/Iran conflict.
The main negative effect on the South African economy remains the high international oil price and lack of a resolution.
During August, the Brent oil price increased from $78 per barrel on 4 August 2026 to $89 per barrel on 28 August 2026. This had increased the under recovery for diesel up to R2.78 per litre and for petrol by R1.06 for 95 ULP by Thursday, 28 August 2026, and it is expected that fuel prices will increase sharply at the beginning of September 2026.
Despite these negative effects, the share market on the JSE recovered strongly during August 2026.
The ALSI increased by 6 680 points from 31 July 2026 to 118 173 last Friday, gaining 5.65%.
The FIN15 index added 0.83% over the month, whilst the Resource 10 index gained a massive 33.50%.
This strong increase came on the back of the sharp increase in the gold price by $436 (10.7%) since the end of July 2026, closing Friday at $4 479 after it traded in mid week as high as $4 652 per ounce.
Platinum jumped by $246 per ounce to close Friday at $1 858. All these markets have now recovered more than 50% of the losses since the 28 February 2026 conflict between the US and Iran started.
Domestic equity markets were also positive last week after Stats SA announced that headline annual producer price inflation (final manufacturing) slowed sharply to 5.7% in July 2026, down from 7.5% in June. This figure came below market expectations of 6.1%, marking the second consecutive monthly decline due to a substantial retreat in global oil and fuel costs.
The Rand exchange rate appreciated strongly from R16.65/$ on 31 July to stronger than R16/$ on Wednesday (R15.93/$), but lost some steam Friday afternoon to close at R16.17/$.
It still represents a strengthening of 50 cents over last month. Against the pound, the currency gained 44 cents last month to close Friday at R21.88/£ and appreciated against the Euro last month by 38 cents to R18.72/€.
The sudden depreciation on Friday was primarily triggered by a sharp sell off in precious metals and global shifting sentiment when investors broadly engaged in profit taking and reduced their exposure to risk sensitive emerging market currencies ahead of the conclusion of the US Federal Reserve’s Jackson Hole symposium.
Prospects for the coming week
Investors will await this week, 31 August to 4 September 2026, the release of the US Non Farm Payrolls (NFP) jobs report for August on Friday.
This data is crucial for investors trying to gauge the health of the US labour market and the trajectory of potential interest rate hikes.
Analysts and dealers will also closely digest the fallout from Fed Chair Kevin Warsh’s recent Jackson Hole speech.
Warsh suggested that the next move in US interest rates is uncertain and may or may not be changed up or down.
Domestically, the RMB/BER business confidence index in South Africa for Q3 will be announced on Thursday.
The Index fell by 8 points to 39 in Q2 2026, the lowest since Q3 2025, reversing the prior two quarters of improvement and moving just below its long term average of 40. It is expected that the index has decreased even further to 34 in Q3.
Chris Harmse is the consulting economist of Sequoia Investment Solutions and a senior lecturer at Stadio Higher Education.
