According to Jinshi, institutional analysis pointed out that due to South Africa's huge exposure to platinum, palladium and gold mining, the rise in precious metal prices has boosted the outlook for South African stocks. South Africa accounts for more than 70% of the world's platinum supply and also has a significant share in gold mining.
In the MSCI South Africa Index, materials stocks have the second-largest weighting after financials at 23%, with gold mining companies accounting for about half. The materials index has risen 12% since March, in line with gold’s strong performance.
Gold prices have risen 20% since March on strong buying from central banks and as the Federal Reserve prepares to cut interest rates.
