In today's Taking Stock, US markets ended mixed, with the Nasdaq and S&P 500 weighed down by tech sector losses while the Dow edged higher in thin trade.
Local Market Commentary
The Top 40 index rose 0.49% to 89,195.7 points, with the All Share index up 0.5% at 96,911.4, supported by positive sentiment around infrastructure funding and early signs of manufacturing recovery. South Africa secured a $474.6 million loan from the African Development Bank, adding to the $1.5 billion World Bank facility to enhance transport and energy infrastructure. June’s Absa PMI improved to 48.5, led by stronger new orders, though output remained weak due to persistent logistical issues. Economic growth stagnated in Q1 2025, while Pretoria seeks to extend trade talks with the US ahead of the 9 July tariff deadline.
European Market Commentary
European equities closed marginally lower as investor caution mounted ahead of US tariff deadlines and tax policy decisions. The STOXX 600 slipped 0.2%, with industrials and banks leading losses, while the FTSE 100 bucked the trend, gaining 0.3%. Germany’s unemployment rose by a lower-than-expected 11,000, highlighting labour market fragility amid broader economic stagnation. In France, manufacturing PMI declined to 48.1, reflecting weaker output and falling new orders, while car registrations dropped 6.7% year-on-year. Tesla sales in France fell over 10% in June, deepening a 39.6% year-to-date decline, outpacing the market’s 7.9% contraction.
US Market Commentary
US markets ended mixed, with the Nasdaq and S&P 500 weighed down by tech sector losses while the Dow edged higher in thin trade. Investors digested President Trump’s commitment to maintain the 9 July trade deal deadline and a passed tax bill, weighing stimulus hopes against fiscal costs. Tesla shares fell 5.4% amid renewed conflict between Elon Musk and Trump. Stronger-than-expected job openings supported a resilient labour market narrative, pushing up Treasury yields. The ISM manufacturing PMI improved slightly to 49.0, while investors now look to the nonfarm payrolls report for cues on potential rate cuts.
Asia Market Commentary
Asia-Pacific markets traded mixed, with Singapore stocks hitting record highs following Fed Chair Powell’s comment that US rate cuts are being delayed by tariff concerns. South Korea’s inflation accelerated to 2.2% in June, exceeding forecasts, while core inflation remained steady. India’s manufacturing sector surged to a 14-month high, driven by strong exports and record hiring, with PMI rising to 58.4. In Japan, BoJ Governor Ueda noted that core inflation remains below the central bank’s 2% target, suggesting continued caution in monetary policy adjustments.
Currency Market Commentary
The South African rand and bonds strengthened on improved inflation outlooks, while sterling approached a three-year high, lifted by broad dollar weakness. The US dollar hovered near multi-year lows against major peers, pressured by dovish Fed commentary and concerns over the long-term implications of President Trump’s expansive spending bill. The greenback touched its weakest levels since early 2022 against the euro and since 2015 versus the Swiss franc, signalling shifting investor sentiment toward alternative currencies.
Commodity Market Commentary
Gold prices edged down as markets awaited US payroll data and reacted to Powell’s cautious tone on rate cuts, though a weaker dollar offered support. Oil prices were largely stable, with investors balancing expectations of increased supply from producers against subdued US demand signals. Meanwhile, the methane-tracking satellite MethaneSAT, backed by Jeff Bezos and instrumental in monitoring emissions from oil and gas infrastructure, was declared lost after going off course, curtailing a key environmental data source.
Impala Platinum Holdings (IMP) +1.79%
Impala Platinum Limited and Impala Bafokeng Resources, both wholly owned by Implats, will consolidate operations effective 1 July 2025 to align corporate structures, enhance reporting efficiencies, and unlock long-term synergies. The move responds to depressed rand-denominated PGM prices and aims to strengthen profitability and sustainability. The restructuring involves no cash exchange, no change in shareholding, and excludes any related party implications, with IBR’s full business transferring to Impala as a going concern under tax rollover provisions.
Acsion (ACS) +26.23%
Acsion Limited reported a strong set of audited results for the year ended 28 February 2025, with revenue up 6.42% to R1.525 billion and headline earnings per share rising 29.50% to 139.04 cents. Earnings per share climbed 52.86% to 412.97 cents, and NAV per share increased 12.55% to 2 996.31 cents. The board declared a final gross cash dividend of 20 cents per share (FY24: 18 cents), amounting to R78.99 million, reflecting the company’s continued growth and capital return discipline.
Numeral (NUM) 0.00%
Numeral Limited posted a sharp turnaround in financial performance for FY25, having shifted from standalone company to group-level reporting. Group revenue surged 1 939% year-on-year to USD 1.69 million, while operating profit rose 1 057% to USD 250 035. Headline and basic EPS both advanced 700% to USD 0.014. No dividend was declared. The results underscore a significant recovery in operating fundamentals.
Constellation Brands (STZ) +2.30%
Constellation Brands missed Q1 expectations, reporting net sales of $2.52 billion and EPS of $3.22, both below consensus, as beer and wine demand softened amid tariff pressures and economic uncertainty. Higher input costs, particularly from aluminium tariffs, and increased marketing spend eroded operating margins in the core beer segment, which declined 150bps to 39.1%. Beer depletion volume dropped 2.6%, reversing a 6.4% rise a year earlier, impacted by weaker sales of flagship brands and reduced consumption among Hispanic consumers following US immigration policy shifts. Despite these headwinds, the company reaffirmed full-year guidance, though shares eased slightly in after-hours trade.
Santander (SAN) -0.36%
Santander announced a £2.65 billion all-cash deal to acquire TSB from Sabadell, positioning itself to become the UK’s third-largest bank by personal current account balances and the seventh-largest branch network. The deal, subject to shareholder approval, aligns with Sabadell’s efforts to resist a potential BBVA takeover and will allow Santander to deepen its UK footprint despite prior speculation of a retreat. Santander projects over 20% return on invested capital and 4% EPS accretion by 2028, supported by at least £400 million in cost synergies. The acquisition will modestly impact capital, consuming 50bps of CET1 at close, but the group expects to maintain a circa 13% CET1 ratio by end-2025. Sabadell plans to return €2.5 billion via an extraordinary dividend funded by the sale, alongside €1.3 billion in ordinary payouts from 2025 earnings.
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