Old Mutual Ltd (JSE: OMU) Closes at 1,199—Will Breakout Momentum Take It to 1,232 Next?

Old Mutual Ltd (JSE: OMU) closed 1.11% higher on Friday at 1,199 ZAC, marking its strongest close since early May as investor sentiment improved across South African markets. The rally was fueled by a combination of domestic tailwinds, including a stronger rand and projected fuel price cuts.

The South African rand ended the week at R17.7650 to the dollar, its best level since December 2024. According to the South African Reserve Bank, foreign reserves rose to $64.804 billion in May, up from $64.318 billion in April, reinforcing investor confidence.

Analysts at Commerzbank attributed the rand’s performance to dollar weakness and greater political stability, including recent progress in South Africa’s long-delayed fiscal policy discussions.

Meanwhile, data from the Central Energy Fund suggests fuel price cuts are likely in July:

• Petrol 93: down 30 cents/litre

• Diesel 0.005%: down 45 cents/litre

• Illuminating paraffin: down 57 cents/litre

These anticipated reductions are expected to ease inflationary pressure, cut costs for businesses, and support broader consumer spending, positive factors for companies like Old Mutual with exposure to household and institutional finance.

Budget Clarity Encourages Long-Term Flows

On the political front, Parliament’s finance committee approved South Africa’s fiscal framework and revenue proposals last week, clearing the way for a full budget vote on June 11. Markets have interpreted the move as a step toward greater fiscal discipline and policy certainty.

Investec Chief Economist Annabel Bishop highlighted that lower risk premiums and macro stability could make local financial stocks—including Old Mutual—more attractive to long-term investors, particularly as the political backdrop turns more predictable ahead of Q3 2025.

Bullish Breakout: Can OMU Hit 1,232 Next?

From a technical standpoint, Old Mutual’s Friday close at 1,199 ZAC confirms a breakout from a multi-week descending trendline that had capped price action since early May. The stock also closed well above its 50-period EMA at 1,170, a level often viewed as a near-term trend confirmation.

The MACD has flipped bullish, with a crossover above the signal line and increasing histogram strength, reinforcing the view that momentum is building.

Key levels to watch:

• Resistance: 1,214 (breakout confirmation), followed by 1,232

• Support: 1,175 (trendline retest), then 1,151

Trade Setup:

• Entry: Above 1,214

• Target: 1,232

• Stop-loss: Below 1,175

If price holds above 1,200 and clears 1,214 with volume, bulls may eye a run to 1,232 in the coming sessions. A pullback to 1,175–1,180 could offer a second-chance entry for traders awaiting confirmation.