PDSNET Market Snapshot

Now that the TACO trade associated with Trump’s war in Iran is over and markets are again posting new all-time record highs, it is worth noting that the JSE has not yet recovered completely and the JSE Overall Index (J203) is still 5,6% below its record high of 128456 made on 27th February 2026.

As an emerging market, the JSE always tends to be more volatile than first world markets – which means it falls further and goes higher. The JSE fell a total of 14,3% during this correction where the S&P500 fell by only 8,8%. It is also important to understand that the markets of the world (including the JSE) always tend to follow Wall Street – so we should expect the JSE Overall index to break to a new record high fairly soon. Consider the chart:

Our Winning Shares List (WSL) is still dominated by commodity shares like Sasol, Pan African, Southern Palladium and Anglogold, so there are still investment opportunities to be found among the blue-chip industrials and financials.

One such blue chip is PSG Financial Services (KST). KST has been spun out of PSG which has spawned many very successful JSE listings like Capitec, and Curro. KST is a thoroughly South African company that has a long track record of excellent performance.

Its business consists primarily of asset management and insurance. In its results for the year to 28th February 2026 the company reported R540bn of assets under management (AUM), up 20% from the year before. It also reported its gross written premiums up 5% to R8bn. The company’s core income increased by 22% to R8,28bn and its recurring headline earnings per share (HEPS) rose by a whopping 34%. These are excellent results. Consider the chart:

KST has been in a steady upward trend since March 2024. We added it to the Winning Shares List (WSL) on 23rd May 2024 at 1610c and since then it has nearly doubled to 2865c.

Like most blue-chip shares trading on the JSE, KST shares fell as a result of the war in Iran and the sharp rise in the price of oil. That sell-off gave private investors a rare opportunity to buy further in to this excellent company.

As a private investor it is important to understand that KST is a services company and has an insignificant working capital requirement, while much of its income is annuity income. Its staff are also highly educated and paid – which means that they are not unionised. Given its long track record of generating profits, this makes it an almost risk-free investment.

Of course, we are not the only ones who are aware of KST’s great performance. The institutional fund managers have long favoured its shares and as a result the shares trade for a relatively high P:E ratio of 21,22 – which compares with the JSE Overall indexes average P:E of 15,34. Nonetheless, it is a good share to accumulate during periods of weakness.

The S&P500 index ended last week just 2,3% below its all-time, record high of 6978.6 made on 27th January 2026. It is apparent that the V-bottom caused by Trump’s war in Iran is almost over. We anticipate a new record high on the S&P within the next few weeks. Consider the chart:

In the end, the Trump’s Iran war took the S&P down 8,8%. It did not even fall sufficiently (10%) to be considered an official correction. All markets have periodic corrections and Wall Street was overdue for a downward move at the time that this happened. You will note that the 50-day moving average did not break down through the 200-day moving average – so there was no death cross. And now the 50-day has started to move up again. The hammer formation which occurred on 7th April was probably the clearest indication that the market was returning to normal.

From an investor’s perspective, the result of the US/Israel war in Iran has come down to a temporarily raised oil price. Trump has predictably folded and backed down on all his bombastic rhetoric, leaving other people to clean up the mess. As the dust settles, we expect that the price of North Sea Brent will drift back down and eventually fall below resistance at $60 per barrel. The rand will resume its strengthening trend and the focus of the markets will return to the productivity gains flowing from AI.

One of the great understandings in the markets is that whatever happens, no matter how disastrous it may seem at the time, there is always a way for you as a private investor to turn it into a profitable investment. You just have to understand what is happening and then decide on the best way to position your capital to benefit. You must always see the situation as an opportunity and take advantage.

We really hope that you took our advice and profited from Trump’s war in Iran. Over the past month, we have run four articles about the situation in Iran and advised you as follows:

1. In our article on 9th March we said, “...the war in Iran will be resolved on some basis - probably because he (Trump) will probably back down in the face of increasing pressure both at home and abroad. If this happens in a relatively short time, the market will turn its attention back to the rapid progress of new technologies and hopefully recover to make a further new all-time record high in due course”. 
   
   
2. In our article on March 16th we said, “We believe that the situation will be resolved and that some degree of normalcy will return sooner or later. When and if that happens, we expect stocks around the world to bounce”.
   
   
3. In our article on March 23rd we said, “So, we see this sell-off on the JSE as a buying opportunity to pick up high-quality shares at bargain prices” and “Buying shares at a time like this can be scary, but remember our maxim: If you don’t feel the risk, then you are probably not going to make any money”.

4. In our article on 6th April we said, “The impact of artificial intelligence on productivity levels worldwide is a far more important trend and will continue to push markets up for years to come. In the context of that, Trump’s foray into Iran is a mere “bump in the road”. You should take this opportunity to buy high-quality blue-chip shares while they at these low levels”. 

It is always worth stepping back to look at where the markets are over the long-term. It helps you to view current events within their historical context to obtain some perspective. Consider the following chart of the JSE Overall index going back to February 1985:

What you are looking at here is the history of the past 41 years. I have marked on the chart the 1987 crash, the 1998 dot com crash, the 2008 sub-prime crisis, the impact of COVID-19, and now Trump’s Iran war.  Obviously, the chart is semi-logarithmic because on a linear chart, events from the remote past, like the 1987 crash, become almost invisible, while current events, like the war in Iran, would assume a disproportionate importance.

From a long-term technical perspective, I have always viewed the downward spike associated with COVID-19 to be an “aberration” because it was not caused by economic events. Rather, it was a once-off, black swan event that resulted in a sharp and short-lived V-bottom. As soon as it became apparent that the pandemic would be controlled, the markets resumed their upward trend.

Disregarding this aberration, it is clear that the JSE Overall Index has been moving between two almost parallel upward sloping trendlines. These are known to technical analysts as channel lines and they show where the market is now in terms of its past extremes.

Perhaps what stands out the most from this chart is just how insignificant the impact of the Trump war in Iran really is. At the worst point, on 20th March 2026, events in Iran took our market down a total of 14,3% - and it had even less impact on Wall Street where the S&P500 came off by only 9,1%. This difference is as it should be because the JSE represents emerging markets generally and is always more volatile than Wall Street.

It has become apparent that Trump, in his second term, set out to try and roil markets, and especially Wall Street, as much as possible. His first efforts came in the form of a wild and inconsistent tariff policy which impacted markets - until investors became inured to his on again, off again policies. Then the TACO trade became a feature of Wall Street where traders capitalised on his repeated and predictable propensity to back down.

Seeing that tariffs no longer had the power to move the market he resorted to foreign invasions. He talked about invasions of Greenland and Canada, but the idea of going to war with America’s erstwhile long-term allies proved to be too much even for his sycophantic staff. So, he invaded Venezuela and executed a leadership change there.

This event went very smoothly, but disappointingly it did not have a major impact on Wall Street. So, encouraged by the "success” of his leadership change in Venezuela, and egged on by Israel’s President Netanyahu, he decided to try something much more dangerous – the attack on Iran. Without considering the consequences, he arranged for the assassination of the spiritual leader of 250 million Shiite Muslims.

By so doing he has set in motion a chain of events that can only be bad for Americans worldwide – and which has short-term negative consequences for everyone on the planet.

Despite this, we see two positives coming out of this mess:

1. It will probably lead directly to the end of the MAGA movement and Trump’s influence. MAGA supporters have shown that they are completely unconcerned about Trump’s criminal convictions for fraud, his abuse of women, his January 6th insurrection and by his persistent lying, but that the increase in the “gas” price to above $4 per gallon in Texas is simply unacceptable.  
2. It will sharply accelerate the world’s move away from fossil fuels generally. The world economy has been moving steadily towards renewables ever since they became cheaper than their fossil fuel alternatives – but the doubling of the oil price has made that move an imperative.

Like all events which impact directly on the stock market, Trump’s war in Iran provides an opportunity for private investors to capitalise.

Oil prices will probably remain high for the rest of this year, but they will gradually come down as markets find other sources of energy and find ways around the bottleneck in the Strait of Hormuz.

The impact of artificial intelligence on productivity levels worldwide is a far more important trend and will continue to push markets up for years to come. In the context of that, Trump’s foray into Iran is a mere “bump in the road”. You should take this opportunity to buy high-quality blue-chip shares while they at these low levels.