In today's Taking Stock, we look at how TSMC announced that its new domestic fab in Kaohsiung would create 7,000 tech jobs and emphasized its ongoing expansion in Taiwan.
Local Market Commentary
The Top 40 index fell 0.96% to 81,410.3 points, while the All Share index dropped 1.04% to 88,637.5 points. South Africa's environment minister announced limited exemptions for coal-fired power stations from air quality laws, emphasising that these are not a "blanket reprieve" but a measure to balance emissions reductions with electricity supply. Meanwhile, Saudi Arabia’s Jameel Motors has partnered with China’s Changan Automobile to distribute SUVs, sedans, pickups, and new energy vehicles in South Africa, marking their first entry into the market. South Africa remains the largest automotive market in sub-Saharan Africa, with over 500,000 new vehicle sales in 2024 and rising demand for affordable, high-tech models.
European Market Commentary
European shares closed at a two-month low on Monday, with the STOXX 600 index dropping 1.5%—its biggest daily decline in nearly three weeks—as investors reacted to U.S. President Donald Trump's tariff threats. Germany’s consumer price inflation eased to 2.3% in March, slightly below the 2.4% forecast. Eurozone inflation data is due today, with traders pricing in a 58-basis-point rate cut by the end of 2025. In the UK, shop prices fell by 0.4% year-on-year in March, a smaller decline than February’s 0.7%, though rising costs and a new employer tax could drive prices higher in the coming months.
U.S. Market Commentary
The S&P 500 fell 4.6% in Q1 2025, while the Nasdaq Composite plunged 10.5%, marking their worst quarterly performances since 2022 as new tariffs from the Trump administration fuelled fears of a global trade war. The Dow Jones also declined 1.3% over the period. Goldman Sachs raised the U.S. recession probability to 35% from 20% and cut its S&P 500 year-end target to 5,700, anticipating further Federal Reserve rate cuts. Investors now turn their attention to key economic data releases, including ISM business activity surveys, the non-farm payrolls report, and speeches from Fed officials, including Chair Jerome Powell.
Asia Market Commentary
Asia-Pacific stocks climbed as Wall Street rebounded, with investors awaiting clarity on U.S. tariff policies. The Reserve Bank of Australia held rates at 4.1%, citing easing inflation, which slowed to 2.4% in February. South Korea’s exports rose 3.1% in March, marking a second consecutive month of growth but missing expectations, while imports increased 2.3%, leading to a trade surplus of $4.99 billion. However, factory activity contracted slightly to 49.1 due to weak domestic demand. In China, manufacturing activity expanded at its fastest pace in four months, with the Caixin PMI rising to 51.2, driven by strong export orders and an improving labour market.
Currency Market Commentary
The South African rand strengthened as reports suggested the ruling coalition’s two largest parties were nearing a budget agreement. The U.S. dollar remained stable after a difficult quarter, with investors bracing for a new round of reciprocal tariffs from President Donald Trump, set to be announced on Wednesday. Meanwhile, the Australian dollar hovered near a four-week low ahead of the central bank's policy decision. Market sentiment remains cautious as details of the impending U.S. tariffs remain unclear.
Commodity Market Commentary
Oil prices edged higher following U.S. President Donald Trump’s threats of secondary tariffs on Russian crude and potential military action against Iran, though fears of a trade war’s impact on global growth limited gains. Meanwhile, gold reached a record high as investors sought safe-haven assets amid rising inflation concerns linked to Trump’s tariff policies. The precious metal also recorded its strongest quarterly performance since 1986, highlighting heightened economic uncertainty.
PSG Financial Services Limited (KST) +0.28%
PSG Financial Services announces a trading statement for the year ended 28 February 2025, indicating a significant increase in earnings. The company expects headline and recurring headline earnings per share (HEPS) to rise between 23% and 26%, reaching 99.9 to 102.3 cents, up from 81.1 cents in the prior year. Recurring HEPS (excluding amortisation) is projected to grow by 22% to 25%, while attributable earnings per share are anticipated to increase within the same range. This financial guidance, based on unaudited figures, reflects the company's strong performance. Full results will be released on 16 April 2025.
Emira Property Fund Limited (EMI) -3.88%
Emira provided a pre-close operational update, highlighting a stable performance despite economic challenges. The South African commercial portfolio saw increased vacancies at 6.8%, primarily due to tenant downsizing and disposals, with tenant retention at 77.5% and improved lease reversions. The residential segment maintained strong occupancy, with collections at 98.4%, while R312.9m was realised from unit disposals. Internationally, the US portfolio saw a profitable asset sale, and Emira expanded its stake in Poland-based DL Invest to 45% through a €44.5m investment. Capital management remained robust, with a reduced loan-to-value ratio of 34.1% as at 28 February 2025, expected to settle around 36%–37% post-investment. Emira remains on track to exceed its FY25 objectives, with full results to be released on 28 May 2025.
York Timber Holdings Limited (YRK) +4.95%
York reported an 18% increase in revenue to R1.038 billion for the six months ended 31 December 2024, with adjusted EBITDA rising by R76 million to R84.3 million. Net debt stands at R507.3 million following an increase of R71.2 million, while cash generation improved significantly to R45.7 million from a prior cash outflow of R7.8 million. The biological asset value grew by 5% to R2.978 billion, and net working capital increased by 20% to R245.2 million. Earnings per share surged from 5.64 cents to 15.86 cents, while headline earnings per share rose from 4.67 cents to 14.31 cents. Core earnings per share improved from a loss of 10.06 cents to a marginal loss of 0.09 cents. Net asset value per share increased to 623 cents, though no interim dividend was declared.
Taiwan Semiconductor Manufacturing Company Limited (2330) -4.41%
TSMC announced that its new domestic fab in Kaohsiung would create 7,000 tech jobs and emphasized its ongoing expansion in Taiwan despite concerns over its significant investment in the U.S. The company, which is central to Taiwan's economy, reaffirmed that a substantial portion of its production will remain on the island. TSMC's executive vice president Y.P. Chyn confirmed that the new fab, which will produce advanced 2nm chips, is on track to begin volume production in the second half of 2025. The company also assured that Taiwan will continue to play a critical role as its home base.
Rio Tinto Limited (RIO) -4.76%
Norges Bank Investment Management, the world's largest sovereign wealth fund, announced it will vote against a resolution for Rio Tinto (RIO.L) to review its dual listings in London and Sydney. The resolution, put forward by hedge fund Palliser Capital and other shareholders, will be voted on at Rio Tinto's AGM on Thursday. Norges Bank holds a 2.51% stake in Rio Tinto Plc and is the seventh largest shareholder. Rio Tinto has recommended shareholders vote against the resolution, stating that unifying the dual-listed company structure is not necessary for the group's strategic flexibility.
Aston Martin Lagonda Global Holdings Plc (AML) +7.05%
Aston Martin will raise over £125 million ($161.9 million) through funding from its chairman, Lawrence Stroll, and the sale of its stake in his Formula One team. This equity raise is the company’s seventh since Stroll's arrival in 2020, during which he has invested £600 million. The funds will help Aston Martin address escalating losses and the impact of U.S. tariffs. The Yew Tree Consortium, led by Stroll, will invest £52.5 million by purchasing 75 million shares at 70 pence per share, increasing his stake to approximately 33%. The company remains focused on achieving positive operating earnings in 2025 and becoming free cash flow positive in the second half of the year.
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