South African stocks have been performing exceptionally well since the establishment of a business-friendly unity government in early July. The main index has risen over 7% in dollar terms, outperforming emerging-market peers which saw a decline of 0.8%. This indicates strong local investor confidence.

The positive momentum is supported by the absence of power blackouts for the past eight months and a decrease in inflation rates, which are now below the central bank's target range. These developments have raised expectations for potential interest rate easing, which could further improve market conditions.

However, some investors remain skeptical about South African companies consistently exceeding rising earnings expectations, which is crucial for sustaining the current rally into 2025.