💡JSE Sectors: The Why Behind The Flows

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

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Published: Sunday, 08 February 2026

Three primary macroeconomic narratives are driving this specific rotation on the JSE:

The "Flight to Stability" & Yield: In an uncertain global environment, investors are risk-averse. They are flocking to Banks 🛡️ because South African banks are well-capitalized, conservative, and pay high dividends. The "higher-for-longer" interest rate environment boosts their margins, making them a natural hedge against inflation.

The "Old Economy" Revival: The era of cheap money fueling speculative tech growth is over. There is a distinct preference for tangible, real-world assets. Coal ⛏️ is benefiting from global energy security fears, while Telecoms 📡 are seen as essential utilities—data is the modern commodity that consumers cannot cut, even in a recession.

The Consumer "Hard Landing": The most bearish signal in the market is the collapse of Staples and Discretionary stocks. The market is pricing in a severe contraction in household spending. High interest rates, food inflation, and administered costs (electricity/rates) have crushed the consumer's disposable income. The market is saying that retailers will face margin compression and lower volumes for the foreseeable future.

Lester Davids

Senior Investment Analyst: Unum Capital