Shoprite Holdings Posts Resilient Interim Results as Sales Rise 7.2% to R136.8bn

South African Market Summary

South African equities declined sharply, with the JSE All Share index falling 5.53% to 119,962.82 and the Top 40 dropping 5.85% to 111,842.41, reflecting broad-based market pressure. Shoprite Holdings reported a 7.7% increase in interim profit, supported by strong festive season demand and resilient trading momentum. Aspen Pharmacare indicated its unbranded version of Novo Nordisk’s diabetes treatment Ozempic could receive Canadian regulatory approval in Q2–Q3 2026, positioning the group for early generic competition. Nedbank Group reported a 2% increase in full-year headline earnings, supported by improved impairments despite modest revenue growth.                                                         

European Market Summary

European equities declined sharply amid escalating geopolitical risk and renewed inflation concerns. The pan-European STOXX 600 index fell 3.1%, leaving it roughly 5% below its recent record high, as investors assessed the potential economic impact of a prolonged Middle East conflict and rising oil prices. Eurozone inflation surprised to the upside, accelerating to 1.9% from 1.7%, driven by higher food and services costs, which could complicate the European Central Bank’s policy outlook if energy prices remain elevated. In the United Kingdom, updated fiscal projections indicated a wider buffer for meeting medium-term budget targets, with stronger-than-expected tax revenue forecasts.

US Market Summary

U.S. equities closed lower as escalating Middle East tensions heightened inflation concerns and increased market volatility. The S&P 500 declined 0.9% after earlier falling more than 2%, while selling was broad-based across major exchanges. Market breadth weakened significantly, with declining stocks outnumbering advancers by more than four-to-one on the NYSE. The Cboe Volatility Index rose to its highest level since November, reflecting elevated risk sentiment. Federal Reserve Bank of Minneapolis President Neel Kashkari noted that the conflict with Iran has increased uncertainty around the U.S. economic outlook and complicated the Federal Reserve’s interest-rate policy outlook.

Asian Market Summary

Asian markets weakened sharply amid rising geopolitical tensions and mixed economic data across the region. South Korea’s Kospi index fell 8%, marking its steepest decline since August 2024 and prompting a temporary trading halt by the Korea Exchange. In China, manufacturing activity contracted for a second consecutive month, with the official PMI declining to 49.0 in February, highlighting persistent weakness in domestic demand despite resilient exports. In contrast, Japan’s services sector expanded at its fastest pace in nearly two years, supported by stronger business activity and rising new orders, signalling improving demand conditions in the economy.

Currency Market Summary

The South African rand weakened as escalating Middle East tensions triggered a global shift towards safe-haven assets. The U.S. dollar strengthened to a three-month high in early Asian trading, supported by rising geopolitical risk and concerns that higher energy prices could sustain global inflation pressures. The euro declined 0.3% to $1.1581, extending its recent losses after eurozone inflation data surprised to the upside in February. The combination of geopolitical uncertainty and firmer U.S. dollar momentum placed renewed pressure on emerging market currencies, including the rand, as investors reduced exposure to risk-sensitive assets.

Commodity Market Summary

Oil prices rose more than $1 as escalating conflict between the U.S., Israel and Iran disrupted Middle East energy flows and heightened supply concerns. Iraqi output has reportedly fallen by nearly 1.5 million barrels per day due to export constraints, while tanker traffic through the Strait of Hormuz — a key route for roughly 20% of global oil and LNG shipments — remains severely disrupted. However, expectations of potential U.S. naval escorts for tankers helped limit further gains. In contrast, U.S. crude inventories rose by 5.6 million barrels last week, signalling softer demand dynamics. Gold advanced more than 1% as geopolitical uncertainty supported safe-haven demand.

Nedbank Group (NED) -3.17%

Nedbank reported a resilient FY performance, with headline earnings rising 2% to R17.2 billion and revenue increasing 3% to R73.9 billion. Credit quality improved notably, with the credit loss ratio declining to 68 bps from 87 bps in the prior year. However, operating expenses increased 7% to R43.4 billion, lifting the cost-to-income ratio to 57.8%. Diluted headline earnings per share rose 3% to 3,628 cents, while basic EPS declined sharply due to one-off factors. The group declared a final dividend of 1,104 cents per share, taking the full-year dividend to 2,132 cents, up 3%, supported by a solid capital position.

Discovery (DSY) +0.46%

Discovery delivered a strong interim performance for the period ended 31 December 2025, with normalised operating profit rising 24% to R8.9 billion. Growth was supported by a 19% increase in normalised profit from operations in Discovery South Africa and a 41% surge from the global Vitality business following the restructuring of international operations. Headline earnings increased 29% to R5.7 billion, while normalised headline earnings rose 27%, supported by lower finance costs and improved leverage. Return on equity improved to 17.4%. Embedded value increased to R135.8 billion, with new business API rising 12% amid continued momentum in the Vitality shared-value model.

Shoprite (SHP) -4.41%

Shoprite reported resilient interim performance for the 26 weeks ended 28 December 2025, with sales from continuing operations rising 7.2% to R136.8 billion, supported by strong festive-season trading and market share gains. Growth was achieved despite very low internal selling price inflation of 0.7%, reflecting the group’s focus on affordability, including R9.7 billion in Xtra Savings discounts. Supermarkets RSA, contributing 84.3% of group sales, increased revenue 7.1%, while the Checkers Sixty60 on-demand platform delivered strong growth of 34.6% to R11.9 billion. Adjacent businesses, including Petshop Science and Uniq Clothing, expanded rapidly, with sales rising 70.9%.

Wilson Bayly Holmes–Ovcon (WBO) -16.51%

WBHO reported mixed interim results for the period ended 31 December 2025, reflecting stable operational activity despite softer earnings momentum. Revenue from continuing operations declined 4% to R14.0 billion, while operating profit decreased 3% to R676 million. Earnings per share from continuing operations increased marginally to 1,086 cents, supported by disciplined project execution across key markets. Activity remained strong in South Africa, particularly in roadworks, renewable energy and Western Cape building projects, while mining infrastructure developments in West Africa and Zambia contributed to regional performance. The order book declined slightly to R36.4 billion, with net asset value improving to R5.8 billion.

Aspen Pharmacare (APN) +0.45%

Aspen reported a transitional interim performance for the six months ended 31 December 2025, with normalised EBITDA declining 13% to R5.05 billion, reflecting the absence of prior-year mRNA manufacturing contributions. Growth in the core Commercial Pharmaceuticals segment remained robust, with revenue rising 4% and EBITDA increasing 11% in constant currency terms, supported by demand for key products including Mounjaro® in South Africa. Manufacturing returned to positive EBITDA of R208 million amid ongoing restructuring of sterile facilities. Free cash flow strengthened to R2.0 billion, reducing net debt to R28.6 billion, while the planned divestment of Aspen APAC remains on track.

CrowdStrike Holdings (CRWD) +1.70%

CrowdStrike delivered strong guidance, forecasting fiscal 2027 revenue of $5.87–$5.93 billion, slightly above market expectations, reflecting resilient demand for its AI-powered cybersecurity platform. Fourth-quarter revenue rose 23% to $1.31 billion, while adjusted EPS of $1.12 exceeded estimates. The company expects first-quarter revenue of approximately $1.36 billion with EPS broadly in line with forecasts. Demand remains supported by rising enterprise cloud adoption and increasing cybersecurity threats. Strategic expansion continues through acquisitions, including SGNL and Seraphic Security. Shares closed modestly higher as investors balanced strong outlook guidance against ongoing industry competition.

Ross Stores (ROST) -2.30%

Ross Stores forecast annual sales above market expectations, signalling continued resilience in demand for discounted apparel and accessories amid macroeconomic uncertainty. Holiday-quarter comparable sales rose 9%, significantly ahead of estimates, while quarterly earnings of $2.00 per share exceeded forecasts. The off-price retailer also announced a $2.55 billion share buyback programme for fiscal 2026–2027, supporting investor sentiment. Management expects annual same-store sales growth of 3%–4%, reflecting sustained value-driven consumer behaviour as inflation pressures persist. However, projected full-year earnings per share guidance was broadly in line with market expectations. 

Blackstone (BX) -3.81%

Blackstone faced elevated redemption pressure in its flagship $82 billion BCRED private credit fund during the first quarter, with clients withdrawing $3.7 billion amid broader investor concerns around the private credit sector. After accounting for $2 billion in new commitments, net outflows totalled $1.7 billion, marking the fund’s first quarterly withdrawals. Redemption requests reached 7.9%, prompting Blackstone to raise its usual 5% redemption cap to 7%, supported by a $400 million investment from the firm and senior employees. The development highlights rising scrutiny around valuation, liquidity and transparency within the rapidly expanding $2 trillion private credit industry.

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