{"id":22830,"date":"2026-02-18T05:42:27","date_gmt":"2026-02-18T05:42:27","guid":{"rendered":"https:\/\/microvibenews.com\/?p=22830"},"modified":"2026-02-18T05:42:27","modified_gmt":"2026-02-18T05:42:27","slug":"sa-back-from-the-brink-now-for-the-hard-part-hendrik-du-toit","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=22830","title":{"rendered":"SA back from the brink, now for the hard part \u2013 Hendrik du Toit"},"content":{"rendered":"

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South Africa\u2019s strong market performance and improving fiscal metrics have created a window of opportunity for investors, but sustained progress will depend on disciplined policy execution and political cooperation.<\/p>\n

This is the view of Hendrik du Toit, founder and CEO of Ninety One, who spoke alongside Jeremy Gardiner (director) and Clyde Rossouw (head of quality) at an investment outlook function in Cape Town on Tuesday.<\/p>\n

Read:
Ninety One-Sanlam deal set to close on Monday
Du Toit sees \u2018substantial opportunities\u2019 as Ninety One powers ahead<\/p>\n

Journalist and media personality Bronwyn Nielsen asked Du Toit where his optimism about South Africa currently stands.<\/p>\n

\u201cTwo years ago, you were at seven out of 10 \u2013 that was your level of enthusiasm. Can I say eight and a half now?\u201d she asked.<\/p>\n

He replied: \u201cNo, I would say it\u2019s harder as you get close to execution. I would say six and a half.\u201d<\/p>\n

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Du Toit argues \u00a0that favourable conditions in South Africa \u2013 such as a stronger rand against the dollar and a year of good market returns \u2013 will only translate into lasting growth if South Africa avoids self-inflicted setbacks.<\/p>\n<\/blockquote>\n

\u201cWe\u2019ve stopped at the abyss. Whether we\u2019ll be a 5% economy \u2013 that\u2019s the question \u2026 but we can change the economy to a 2%-3% economy.\u201d<\/p>\n

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Journalist Bronwyn Nielsen in conversation with Ninety One founder and CEO Hendrik du Toit. Image: Liesl Peyper\/Moneyweb<\/p>\n<\/div>\n

A shifting global investment landscape<\/strong><\/p>\n

Du Toit\u2019s discussion with Nielsen placed South Africa\u2019s outlook within a fast-changing global financial order, which he describes as moving away from US dominance towards a more multipolar system.<\/p>\n

\u201cWe are at the end of a single superpower-dominant world. Opportunities and power are distributing around the world,\u201d he said.<\/p>\n

Despite talk of diversification away from the United States, he warns against excluding it from portfolios. \u201cThe most expensive decision you could make is to write off America.\u201d<\/p>\n

Large sovereign wealth funds are beginning to \u201cmarginally shift capital out of US assets\u201das geopolitical tensions and the heavy use of sanctions encourage the development of alternative financial networks.<\/p>\n

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Listen\/read:
Business backs Ramaphosa reforms but urges implementation
Brics bloc acts in unison on gold reserves
Crime in SA is out of control and it\u2019s time for business leaders to say: Enough is enough<\/p>\n

Du Toit points to Middle Eastern and Asian markets that could channel capital into \u201cdollar equivalent assets that do not touch the dollar\u201d, potentially reshaping global asset allocation over time.<\/p>\n

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He expects the dollar to weaken cyclically rather than collapse.<\/p>\n<\/blockquote>\n

\u201cWe\u2019re in a dollar down cycle. It won\u2019t collapse, but you won\u2019t live in the age of a super dollar until the world shifts.\u201d<\/p>\n

Market metrics support cautious optimism<\/strong><\/p>\n

Gardiner provided a snapshot of recent market performance that underpins improved sentiment toward South Africa, highlighting strong returns across several asset classes.<\/p>\n

\u201cIn SA, we\u2019re not used to good news, so we\u2019d better learn how to fly. 2025 was a great year for SA,\u201d he said.<\/p>\n

Among the standout figures are:<\/p>\n

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  • Bonds up 21%;<\/li>\n
  • Rand\/dollar up 12%; and<\/li>\n
  • Gold up 50%.<\/li>\n<\/ul>\n

    He said fiscal metrics are also improving, noting that government debt relative to GDP is stabilising and commodity-driven revenue gains could reduce pressure for tax increases.<\/p>\n

    \u201cA tax increase is therefore unlikely in the upcoming budget.\u201d<\/p>\n

    Looking ahead, the consensus expectation is for three more interest rate cuts in SA, he said.<\/p>\n

    Read: Economists see three more SA rate cuts<\/p>\n

    South Africa could also regain investment-grade status within a few years if reforms hold. \u201cNational Treasury hopes that we could get back to investment grade by 2028.\u201d<\/p>\n

    Global outlook mixed<\/strong><\/p>\n

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    Turning to global markets, Gardiner said US interest rates are expected to decline, while \u201cthe dollar is bearish, but not as much as in 2025\u201d.<\/p>\n

    Europe, he said, is \u201cin a good space\u201d with inflation under control and new trade agreements with China and India.<\/p>\n

    The UK, however, faces ongoing fiscal strain and is losing wealthy residents due to tax changes and the closure of investor visa programmes.<\/p>\n

    China has posted a record trade surplus despite tariff uncertainty, underscoring the resilience of global supply chains.<\/p>\n

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    Gardiner believes the overall balance of risks for South Africa is favourable.<\/p>\n<\/blockquote>\n

    He cautions, though, that domestic policy mistakes \u2013 so-called \u201cown goals\u201d \u2013 could undo progress.<\/p>\n

    Read:
    SA unemployment falls to lowest level since 2020
    SA\u2019s president vows renewed growth drive as markets soar<\/p>\n

    Portfolio strategy in a low-return world<\/strong><\/p>\n

    Rossouw focused on asset allocation and portfolio construction, arguing that investors face structurally lower returns and heightened uncertainty.<\/p>\n

    \u201cWe are living in a low- to mid-single-digit return world,\u201d he said, adding that volatility is likely to rise.<\/p>\n

    He warns that many investors have become overly focused on benchmark tracking rather than true risk management. \u201cThe only risk people seem to try and solve is how far away are you from the index.\u201d<\/p>\n

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    South African equities, he argues, have once again become competitive with global equities.<\/p>\n<\/blockquote>\n

    Bond markets also stand out due to elevated yields. \u201cWe think the one area that still looks relatively attractive is bond markets \u2013 with yields still high in SA.\u201d<\/p>\n

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    Rossouw cautions that commodity-driven optimism may fade, suggesting that the precious metals rally is \u201cprobably very nearly over\u201d \u2013 even as gold\u2019s longer-term fundamentals remain supportive, according to Gardiner.<\/p>\n

    Read\/listen:
    Investors pile into South African bonds at weekly debt sale
    Two great years for SA bonds, can the momentum continue?<\/p>\n

    Rossouw emphasised that investors should broaden their search for returns, adding that technology giants may not dominate indefinitely.<\/p>\n

    \u201cI don\u2019t think the hyperscalers like Alphabet and Meta \u2026 will necessarily be the best performers for the next decade,\u201d he said, predicting stronger prospects for healthcare due to AI-driven drug discovery.<\/p>\n

    He also highlighted opportunities in cybersecurity and data protection, emphasising that AI depends on existing software ecosystems.<\/p>\n

    Opportunity Fund asset allocation<\/strong><\/p>\n

    Rossouw detailed the positioning of Ninety One\u2019s multi-asset balanced Opportunity Fund as at 31 December 2025 as follows:<\/p>\n

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    • Commodities \u2013 3.9%;<\/li>\n
    • Global property \u2013 1.3%;<\/li>\n
    • SA bonds \u2013 17.3%;<\/li>\n
    • SA cash \u2013 9%;<\/li>\n
    • Global cash \u2013 4.2%;<\/li>\n
    • SA listed local equities \u2013 11.1%;<\/li>\n
    • SA listed global equities \u2013 18.5%; and<\/li>\n
    • Global equities \u2013 34.6%.<\/li>\n<\/ul>\n

      While global equities remain the largest allocation, he says there are \u201cselect opportunities\u201d in SA equities.<\/p>\n

      Prepare for volatility<\/strong><\/p>\n

      Rossouw stresses the importance of diversification and disciplined decision-making in a year in which market volatility is very likely.<\/p>\n

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      \u201cThis is the year in which you must consider a range of different outcomes,\u201d he said, warning of \u201cmore uncomfortable months\u201d ahead after a relatively calm 2025.<\/p>\n<\/blockquote>\n

      Gardiner echoed this message in the context of currency strategy, saying investors should refrain from making reactive decisions during periods of market stress.<\/p>\n

      With the rand currently stronger, he suggests it may be an opportune moment to gradually increase offshore exposure rather than acting in panic during a downturn.<\/p>\n

      Read:<\/p>\n

      Seven charts that show how SA may finally be turning the corner<\/div>\n
      SA\u2019s president vows renewed growth drive as markets soar<\/div>\n

      Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n