Earlier this year it seemed that an increase in global bullishness meant the end of the road for risk-off investment strategies and, by extension, the rise in South African equities. However, 6 months later, the band is still playing, and the ship is refusing to go down.

South African equities have flourished in the face of the doomsayers, with returns this year doubling the emerging market benchmark equity performance. Both the all-shares index and the top-40 share have hit fresh all time highs this week, and prophecies of gloom for South African stocks appear to have missed the mark somewhat.

Part of the reason for this is that, when it comes to risk attitudes, much of the song remains the same. South Africa has certainly benefitted from its continued attractiveness to risk-off investors, as global bullishness has receded from whence it came. For instance, as it is relatively well sheltered from euro zone turmoil, and as major gold exporter, firms based in the gold sector are ostensibly an attractive investment for the globally cautious.

However, while ongoing uncertainty in the euro zone has meant that global sentiment has not recovered to a consistently risk-on position, there is more to South Africa’s performance than just a reliance on safe-haven gold. This is demonstrated by the highly fluctuating performance of gold during 2012, adding 3 percent to its value in total in 2012 and dropping in value over the second quarter. By contrast, South African equities have grown in value consistently over the year, adding ten percent thus far.

Indeed, according to John Paul Smith of Deutsche Bank, it’s not because of the country’s natural resources but despite them that equities have hit fresh highs. Resources have notably underperformed in South Africa this year, and other sectors such as financials, consumer stocks and telecommunications have been supporting the rise.