JSE Top 40 Gains 0.51% as Saudi Cash Eases Fiscal Woes

The JSE All Share Index rose 0.51% to close at ZAR 91,019.10, up 466.33 points. The rand remained stable at ZAR 18.81/USD as the market waits for clarity on the budget.

Rand Holds Firm Despite Fiscal Ambiguity

The rand is holding its ground despite the fiscal uncertainty. Tax proposals – most recently the VAT hike being withdrawn – have added to market jitters. Currency strategist Andre Cilliers from TreasuryONE expects the rand to trade in a range of ZAR 18.60 to ZAR 19.00 in the short term. Investors are waiting to see how the government will manage the budget deficit without triggering inflation or stalling growth.

• Key concern: VAT reversal and fiscal shortfall

• Forecast: ZAR 18.60–19.00

• Market mood: Cautious waiting for fiscal resolution

Saudi Capital Inflow Boosts Long-Term Confidence

Some of the local uncertainty is being offset by Saudi investment in South Africa. ACWA Power, backed by the kingdom’s $900 billion sovereign wealth fund, has committed $1.9 billion to renewable energy projects. Other Gulf-backed ventures in mining, logistics and infrastructure are also gaining traction, a sign of deeper bilateral cooperation between Pretoria and Riyadh.

This capital inflow is seen as a vote of confidence in South Africa’s structural growth story, particularly the clean energy transition.

• ACWA Power: $1.9B in renewables

• Key sectors: Infrastructure, energy, real estate

• Gulf capital: Diversifying South Africa’s growth base

JSE Top 40 Tests Technical Resistance

On the technical front, the JSE Top 40 Index is testing a key resistance level at ZAR 84,249 after a sharp recovery from early April lows. Price action is back in a broad consolidation zone and while short-term momentum is fading (as seen in the MACD histogram) bulls are still in control above the 50 EMA at ZAR 81,914.

Trade Setup:

• Buy on breakout: Above ZAR 84,250* Target: ZAR 85,390 and ZAR 86,610

• Stop: Below ZAR 83,421

A breakout will trigger a new high but wait for confirmation. If resistance holds the index will dip to ZAR 82,059 short term.

Outlook: Uncertainty and Opportunity

The rand is tied to budget news but foreign investment and a strong stock index is giving markets hope. The JSE’s upmove and Saudi engagement will be the buffer to ride out domestic fiscal volatility at least in the short term.