January 2026 Monthly Market Summary
Monthly Market Webinar
A reminder of our monthly market call webinar coming up on Friday, 13 February.
3 Things to Know This Month
- Global equity markets started 2026 on a resilient note, with emerging markets outperforming developed markets, supported by a weaker US dollar and strong returns in countries such as South Korea and Brazil.
- Fixed income markets were more volatile, as developed market government bond yields rose, particularly in Japan, while emerging market debt delivered positive returns due to attractive yields and currency support.
- South African equities and bonds extended their strong momentum, with local bonds recording their 13th consecutive month of positive returns – the longest streak in more than 26 years.
Global Market Update
- Global equities posted positive returns in January, with the MSCI World Index up 2.3%, despite elevated geopolitical uncertainty.
- Emerging markets significantly outperformed their developed peers, with the MSCI Emerging Markets Index rising 8.9%, supported by strong performances in South Korea and China.
- In the US, sector performance diverged, as Basic Materials and Energy led gains, while Technology had a weaker start to the year.
- Developed market bond yields moved higher, particularly in Japan, leading to price weakness in long-duration bonds.
- Central banks remained cautious: the US Federal Reserve held rates steady at 3.50%–3.75%. The Bank of Japan also left policy unchanged amid political uncertainty.
South African Market Update
- South African equities gained 3.7% for the month, despite a sharp sell‑off on the final trading day of January.
- The Resources sector led the market, rising 12.5% on the back of higher precious metal prices.
- Similarly, Financials delivered positive returns (3.0%)
- In contrast, Industrials underperformed (-3.4%), as large index constituents such as Naspers (-10.2%) and Prosus (-9.1%) detracted from returns.
- South African bonds returned 1.9%, supported by a decline in yields and broad rand strength, marking their 13th consecutive positive month.
- The SARB kept the repo rate unchanged at 6.75%, while average inflation for 2025 fell to 3.2%, its lowest level in 21 years.
*All data is sourced from Morningstar Direct as at 31/01/2026. The performance of South African asset classes is quoted in rands and the performance of global asset classes is quoted in US dollars.
Chart of the month: Emerging Markets See Record Flows
Non-US stocks dominated performance last year, and whether that trend can continue remains a key question. Through January, however, both international and emerging-market equities have continued to outperform the U.S. by significant margins. Investor sentiment toward emerging markets is especially visible in real-time fund flows. Historical data dating back to 2012 show that January 2026 recorded the largest inflows ever into the largest ETF tracking emerging markets, with over $6.8 billion poured in.
