As we prepare to move into 2025, prospects for local markets will be heavily influenced by the new Trump presidency, as well as the future of energy reform in South Africa, particularly when it comes to the deregulation of Eskom.

“Noteworthy successes of Operation Vulindlela include the restructuring of Eskom and opening up of the entity for private investment in electricity generation, logistics reform around the rail system to allow private rail operators to access the freight rail network and operating ports,” he adds. “Water is also seeing tentative improvement in quality monitoring systems and the turnaround of the water use license system, while visa and digital communication reform are also seeing progress.

This is according to Old Mutual Investment Group (OMIG), who hosted a market outlook briefing recently, where its presenters highlighted that Trump administration policy implementation will be the single most important factor to watch next year when it comes to global markets, while South Africa’s economic growth will depend largely on local energy reform, with the energy crisis being far from over.

OMIG Portfolio Manager Jason Swartz underlined incoming president Donald Trump’s widely publicised plans for increased global trade tariffs as a rising risk for both local and global markets. “The inflation outlook is likely to worsen on this basis, causing a review in the Fed’s rate cutting cycle, given that they are unlikely to cut rates as much as previously expected as a consequence,” he explains.

“While deregulation and tax cuts will be positive for US equities, a trade war escalation is not priced in, and is likely to ultimately disrupt supply chains and impact global growth negatively,” he adds.

Swartz believes that in this environment, emerging markets are set to face headwinds in 2025, unless the dollar rally moderates, and commodity prices recover. “However, South Africa is a haven among emerging markets, given our cyclical and secular growth drivers,” he points out.

When it comes to Operation Vulindlela, he believes that significant progress is being made which supports the case for the SA macro-outlook. “Key tailwinds for the programme include a focus on depth, rather than breadth of reform, as well as political buy-in and collaboration between relevant stakeholders.