South African equity sectors that lagged in 2025 are poised for a recovery as the rally in mining stocks cools, Bloomberg reported. Banks, insurers, and food producers have recently outperformed domestically oriented sectors, while mining shares, buoyed by gold and silver last year, have faced pressure.

Food producers, retailers, and personal-care stocks were among the worst performers on the Johannesburg Stock Exchange in 2025, even as the overall index returned about 38 percent in rand terms and 57 percent in U.S. dollars. The retailers’ index fell 26 percent, while personal care, drug, and grocery stores dropped 8.4 percent.

Macro conditions are supporting the shift. South Africa’s inflation averaged 3.2 percent in 2025, the lowest in 21 years, and the Reserve Bank held borrowing costs at 6.75 percent while projecting 3.3 percent inflation for 2026. Strong precious metals prices have boosted export revenues and aided the rand, while lower food prices are improving household purchasing power.

Financials are set to benefit from falling bond yields and a lower risk premium. South Africa’s 10-year government bond yield has declined to around 8 percent from over 11 percent in 2025, creating scope for banks and insurers to outperform. Analysts also see food producers benefiting from softer input costs and easing inflation, while food retailers face margin pressure.

With inflation trending lower and markets pricing in further rate cuts, investors are increasingly betting that last year’s laggards may finally gain traction.