Trading update : 9 January 2026

As we kick off 2026, a potent mix of state-led growth, technological advances, a commodities super cycle, and structural reforms are reshaping the global investment landscape. China remains a major cog in the global growth engine, with recent GDP upgrades and forecasts signalling the Chinese equity market still has room to run. This resurgence is part of a broader “risk-on” sentiment in emerging markets, where billions are flowing into ETFs as investors hunt for discounted valuations and a cushion against a stabilising dollar. Meanwhile, the AI arms race is entering a new phase of hardware accessibility following AMD’s launch of the MI440X targeting smaller corporate data centres. Closer to home, South Africa is flashing “greenlights” for investors as fiscal consolidation and electricity reforms begin to bear fruit.

Ol’ faithful China

China looks set to remain a global growth driver following a slew of recent and chunky GDP upgrades, with another year of roughly 5% growth achievable. The ruling Chinese Communist Party (CCP) will keep looking to the private sector and selective stimulus across key industries and domestic consumption to drive this growth. Goldman Sachs expects that Chinese stock benchmarks will post another year of growth, though at a slower pace than last year, with earnings supported by AI and policy measures that drive earnings and profit growth. The MSCI China Index (MCHI-NASQ) is forecast to climb 20% to 100 by the end of 2026 from its 2025 close, while the CSI 300 Index is seen rising 12% to 5,200.

Emerging opportunities

Investors poured cash into exchange-traded funds (ETFs) that buy emerging market assets as traders remain bullish on the outlook in the new year. According to data shared by Bloomberg, the $123 billion iShares Core MSCI Emerging Markets ETF (EEM-NASQ) recorded $322 million in inflows, followed by Avantis Emerging Markets Equity ETF, with $198 million. South Korea received the biggest inflow, $253.8 million, led by iShares Inc’s iShares MSCI South Korea amid the ongoing optimism around AI stocks. JPMorgan strategists see another year of emerging market equity outperformance against developed-market peers in 2026 as they still offer discounted valuations and should benefit from low positioning and a stable or weaker dollar. A handful of countries where rates remain very high, including Brazil, Colombia, Mexico, South Africa and India, are providing a cushion for anchoring more inflows.

Putting the chips on the table

Advanced Micro Devices Inc. (AMD-NASQ) announced a new chip, the MI440X, for use in smaller corporate data centres. CEO Lisa Su touted the attributes of a future generation of products, including the forthcoming MI500 series of processors. Su said the rate and pace of AI innovation have been incredible and that the company is just getting started, with a new multibillion-dollar business created out of AI chips in the last couple of years.

Dispensing M&A news

In the latest pharma news, the Wall Street Journal revealed that Eli Lilly (LLY-NASQ) is in talks to acquire Ventyx Biosciences, a biopharmaceutical company developing drugs for inflammatory and autoimmune diseases, for more than $1 billion.

Room to run

China’s stock trading volume climbed to the highest level in four months, suggesting the equity rally at the start of 2026 has further to run. According to Bloomberg, the value of shares changing hands onshore jumped to 2.8 trillion yuan ($401 billion) on Tuesday, the most since September, and well above the daily average of 1.13 trillion yuan over the past five years. The benchmark CSI 300 Index rose 1.6% on Tuesday to close at a four-year high. The gauge was little changed on Wednesday. An increasing number of stocks have also set new one-year highs, and roughly six out of every seven shares in Shanghai and Shenzhen have made gains over the first two days of the year.

Greenlights flash for SA

A series of positive developments is setting the stage for firmer GDP growth in South Africa in 2026. The macroeconomic policy framework was strengthened and made more predictable by the adoption of a lower inflation target, commitment to fiscal consolidation, reduced nominal bond issuance, and the planned formalisation of a fiscal anchor in 2026. Investec analysts forecast another two rate cuts in 2026.

Bearing fruit

South Africa’s ongoing electricity and logistics reforms are expected to boost investment over the medium run, with the IMF projecting that GDP growth will reach 1.8% by the end of the decade, rising 1.4% in 2026, and 1.5% in 2027. However, risks remain tilted to the downside, with weaker-than-expected global activity and an abrupt global financial market correction posing potential threats.

Gagging a goliath

Pepkor (PPH-JSE) has lashed out at Lewis’s attempt to block its bid to buy the furniture business of retail major Shoprite. In papers filed at the Constitutional Court, seen by Business Day, Pepkor argues that such a move would have a chilling effect on domestic and offshore investors in South Africa. Lewis says the proposed merger will create an “insurmountably dominant firm of a size and scale” that no other South African furniture retailer will be able to match.

Sector focus: Commodities

This commodity super cycle looks set to endure. Above-trend global growth is a decent starting point, supported by multiple needle-moving demand drivers, such as forward-thinking governments and their sovereign wealth funds that are taking a more proactive approach to securing the metals that are non-negotiable in enabling the manufacturing industries of tomorrow. The commodity-reliant intensity of data centre build-outs, and the potential rebuilding of Gaza and Ukraine, are also strong potential tailwinds. To illustrate the point, copper is up 4%, aluminium +2.3%, with steel at an all-time high, and precious metals continuing to shine in an environment where President Trump continues to provide more reasons for central banks to shun the US dollar and Treasuries.