GNU Fuels Enormous Investor Dividend as Markets Surge, says Frans Cronje

Frans Cronje says too little has been made of the extraordinary stock market rally that has unfolded since the formation of South Africa’s Government of National Unity (GNU), arguing that the surge represents one of the clearest signals yet of renewed confidence in the country’s future.

In the week before the May 2024 national election, the Johannesburg Stock Exchange’s All Share Index traded at around 76 000 points. Since the GNU was formed, it has lifted beyond 110 000 points, delivering a 44.7% return over roughly 18 months. Cronje says this scale of appreciation is a strong indication of where South Africa: "may yet be headed" if political stability and reform momentum continue to build.

The rand has strengthened in parallel. Trading near R18.45 to the US dollar ahead of the election, it dipped below R17 last week, an appreciation of 7.9%. Cronje argues that both the equity rally and the firmer currency reflect a decisive shift in sentiment after years of drift.

He says the rally also demonstrates the value of using well-researched political trends, data, and information. According to Cronje, clients who recognised early on that a GNU was likely and who understood how markets would respond: "have made a great deal of money." By contrast, he says those without access to high-quality political analysis: "have missed out on one of the greatest market rallies of recent times."

Cronje warns that too many analysts in the public arena simply guess, noting that many offer commentary without real data, political access, or grounding, and that much of their content is: "borrowed from B-grade media platforms." He argues that working with serious analysts using serious data is not only strategically valuable but can be highly profitable, as the post-GNU rally has shown.

He says the surge signals rising expectations that the GNU may unlock long delayed reforms, strengthen institutions, and create a more predictable policy environment. While cautioning that sentiment can reverse if delivery slows, Cronje believes the figures show that South Africa has entered: "an expectedly favourable window" which markets have quickly priced in.

Whether the momentum holds is now a very important question for clients, but Cronje says that with the right insights, data, and analysis, it should be straightforward to make investment decisions that deliver outstanding returns.