📊 JSE Sector Rotation: Leaders & Laggards

Research Notes February 2026 > https://www.unum.capital/post/rfeb2026

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OVERVIEW

The South African equity market is currently undergoing a violent sector rotation. The "safe" defensive plays of 2025 have collapsed, while cyclical value stocks and financials have roared back to life. This report breaks down the relative strength of 14 key JSE sectors against the Top 40 index, revealing a market that is aggressively pricing in a "higher-for-longer" interest rate environment and a besieged consumer, while seeking refuge in cash-generative, asset-heavy industries.

1. 🏆 LEADERS AND LAGGARDS: A TALE OF TWO MARKETS The divergence in the market is currently at extreme levels. We are witnessing a bifurcation where "old money" sectors are thriving while "consumer-facing" and "growth" sectors are being liquidated.

   
   

2. The Leaders: Banks 🏦 stand alone as the undisputed kings of the JSE right now. They are flashing "Strong" 💪 signals across long, medium, and short timeframes. This triple-alignment is rare and suggests a powerful, sustained trend driven by expanding Net Interest Margins and robust balance sheets. Joining them are Coal Miners ⛏️ and Telecoms 📡, which have surged into leading momentum. These sectors represent "utility-style" safety—reliable cash flows that are less sensitive to the immediate discretionary spending crunch. Chemicals 🧪 have also staged a surprise entry onto the short-term leaderboard, hinting at a potential industrial bottoming process.

   
   

3. The Laggards: On the losing side, the carnage is visible in the "SA Inc" consumer stocks. Consumer Staples 🛒—traditionally a defensive haven during recessions—have crashed, capitulating into "High Bearish" 🐻 territory. This suggests that inflation has eroded brand loyalty and volume growth. Technology 💻 and Consumer Discretionary 🛍️ remain the primary laggards, suffering from "High Bearish" or "Oversold" conditions across multiple timeframes, reflecting global tech headwinds and local consumer exhaustion. Platinum Miners 💍, despite long-term strength, have become a short-term laggard, likely reacting to spot price volatility or currency strengthening.

Lester Davids

Senior Investment Analyst: Unum Capital