Nestlé turmoil grows as sudden CEO exit heightens investor pressure on Chairman Bulcke

South Africa

The Top 40 index added 0.53% on Friday as it closed at 97,036.6 points, while the All Share index gained 0.51% to reach 104,458.4 points. Markets are focused on CPI data due Wednesday and the SARB’s policy meeting Thursday after July inflation hit its highest since September 2024, reinforcing price pressure concerns. AfriForum warned Tshwane officials they risk contempt of court for imposing a R194 levy ruled unlawful, underscoring governance risks. Meanwhile, acting Chief Master Kalayvani Pillay acknowledged severe inefficiencies across the country’s 16 Masters’ Offices, describing them as a “burning platform” undermining service delivery, economic efficiency and disproportionately affecting vulnerable communities. Institutional investors will closely monitor inflation trends alongside governance headwinds.

Europe

European equities softened Friday with the STOXX 600 closing 0.1% lower at 554.74 despite a 6% weekly gain, its strongest in four months. Aerospace and defence extended record-setting gains on geopolitical tensions, while healthcare stocks lagged. Investors awaited Fitch’s France credit rating review, with sovereign risk in focus. UK inflation expectations reached 3.8% over five years, their highest since 2019, complicating the BoE’s task ahead of next week’s decision. The FTSE 100 slipped 0.2% on staples and healthcare weakness but logged its second consecutive weekly advance.

United States

The Nasdaq closed at record highs, supported by Microsoft (+1.8%) and Tesla (+7.4%), as investors priced in a 25bp Fed rate cut at next week’s FOMC meeting. Weak jobs data and easing inflation expectations reinforced the case for monetary easing, though sentiment remains cautious. University of Michigan data showed consumer confidence declined for a second month, with households citing risks to labour markets, inflation and business conditions. Vaccine makers fell sharply after reports of heightened regulatory scrutiny, weighing on Pfizer, Moderna and Novavax shares.

Asia

India’s regulator eased access rules for sovereign and retail foreign funds, potentially broadening market participation amid $11.7bn in YTD outflows pressured by high valuations, US tariffs and weak earnings. China’s finance minister pledged more flexible fiscal policy, insisting debt levels remain “reasonable” despite weak demand, property market distress and trade pressures. Exports slowed in August as tariff relief waned, increasing calls for stimulus. The BoJ is expected to hold rates next week but may signal further hikes, with tariffs and slowing US growth clouding Japan’s export outlook.

Currencies

The rand softened ahead of CPI and the SARB’s rate decision, after recent strength against a weaker dollar on soft US labour data. The pound declined Friday following July’s stagnation print but still notched a second weekly gain as investors await the BoE decision. The euro was unmoved by Fitch’s downgrade of France’s sovereign rating. The dollar steadied on Monday in thin Asian trading with Japanese markets shut, as investors positioned ahead of a pivotal week for central bank decisions led by the Federal Reserve.

Commodities

Gold traded near $3,640/oz after four weekly gains, supported by expectations of Fed easing and prospects of further cuts later this year. Oil prices were steady as markets weighed stronger US demand against supply risks from escalating Ukrainian drone attacks on Russian infrastructure. Key targets included Primorsk, Russia’s largest oil terminal, and the Kirishi refinery, collectively processing around 1.4m bpd. Analysts at JPMorgan warned the strikes demonstrate a willingness to disrupt global markets, adding upside pressure to crude prices at a time of already fragile balances.

Caxton and CTP Publishers & Printers (CAT) +5.56%

Caxton delivered resilient FY2025 results despite muted growth, subdued consumer demand and rising competition. Normalised headline earnings per share rose 12% to 178.9c, while normalised EPS increased 15% to 168.4c, reflecting strong cost discipline, efficient sourcing and well-judged capital investment. Revenue grew 0.9% to R13.1bn, supported by raw material savings, while operating profit (normalised) improved 17.1%. Cash generation remained robust with cash balances up R519m to R3.0bn. The board declared a 70c dividend per ordinary share, up 16.7%, underscoring balance sheet strength.

Ascendis Health Limited (ASC) +9.76%

The Board has initiated a process to explore a potential delisting of Ascendis from the JSE, accompanied by a conditional repurchase offer to shareholders at R0.97 per share in cash, excluding treasury shares. The Potential Repurchase Offer remains subject to, inter alia, confirmation of fairness through an independent expert’s opinion. Given the potential material impact on the Company’s share price, shareholders are advised to exercise caution when trading Ascendis securities until a further announcement is issued.

Kore Potash Plc (KP2) +2.53%

Kore Potash, which owns 97% of the Kola and DX projects in the Republic of Congo, reported H1 2025 results marked by operational progress and strengthened liquidity. The Optimised DFS, announced in February, outlined a 23-year LoM based primarily on Proved and Probable Reserves, with scope to extend through upgrading 340Mt of Inferred Resources. The Company secured USD10.5m in new funding and signed non-binding term sheets with OWI-RAMS GMBH to arrange USD2.2bn project financing. Cash rose to USD3.5m (Dec 2024: USD1.3m), with a narrowed net loss of USD0.44m.

Nestlé SA (NESN) -0.91%

Investor pressure on governance has intensified following the abrupt dismissal of CEO Laurent Freixe for undisclosed conduct, marking the second chief executive exit in just over a year. Concerns are mounting over Chairman Paul Bulcke’s leadership, particularly as Nestlé continues to face weak post-pandemic recovery and declining sales volumes. Bulcke, who has chaired since 2017, was re-elected in April with 84.8% support, down from 96% at inception. Investors are increasingly questioning the company’s stability and strategic direction amid leadership uncertainty.

RH (RH) -4.60%

Shares of RH slipped after Q2 revenue of USD899m missed expectations, prompting management to trim its full-year revenue growth forecast to 9–11% (from 10–13%). Adjusted EBITDA margins are now expected at 19–20%, versus prior 20–21%. The luxury furniture retailer cited USD30m in additional tariff-related costs and delayed its Fall Interiors Sourcebook, shifting an estimated USD40m in revenues from Q3 into Q4 and FY2026. The revised outlook highlights pressure on margins and execution risks in the near term.

Pfizer Inc. (PFE) -3.98% & Moderna Inc. (MRNA) -7.40%

Pfizer and Moderna shares fell 3% and 7% respectively after reports suggested US health officials may link Covid vaccines to paediatric deaths in an upcoming CDC panel presentation. While the claims remain unconfirmed, the development has sparked renewed scrutiny over vaccine safety. Moderna reiterated confidence in its monitoring systems, noting no undisclosed risks have been identified across global regulators. Despite extensive evidence supporting mRNA vaccine safety, heightened political and regulatory debate under the new US health secretary adds near-term sentiment risk for vaccine manufacturers.

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