Samsung set for explosive Q4 profit rebound as AI driven memory boom lifts earnings

South African Market Summary

The JSE Top 40 Index gained 0.51% to close at 108,781.31 points, while the All Share Index rose 0.42% to 116,582.66 points. Resource counters outperformed, with the Resources 10 Index up 2.54%, offsetting declines of 0.49% and 0.57% in the Financial 15 and Industrial 25 indices respectively. ASP Isotopes led individual gainers, rising 11.83%, followed by broad strength across mining names. Separately, Nersa’s latest consultation paper proposes recovering an additional R76 billion from electricity consumers to compensate Eskom for prior regulatory errors, exceeding the previously contested R54 billion settlement.

European Market Summary

Europe’s STOXX 600 broke above the 600 level for the first time, closing at a record 601.76 (+0.9%), driven by strong gains in defence stocks as US strikes on Venezuela heightened geopolitical risk. The defence sector rallied 4.1%, with Rheinmetall up 9.3%, reflecting expectations of structurally higher defence spending despite recent ceasefire speculation in Ukraine. Germany’s DAX also reached a record high. Investors now turn attention to central bank policy signals and macro data, while UK consumer borrowing surprised to the upside, reinforcing resilient household demand ahead of the forthcoming Budget.

American Market Summary

Wall Street closed higher, with the Dow Jones Industrial Average reaching a new record as financials and defence stocks outperformed. Energy names also advanced after a US military strike captured Venezuelan President Nicolas Maduro, raising expectations that US firms may gain access to Venezuela’s oil reserves. Trading volumes were elevated at over 19 billion shares. The S&P 500 Financials Index rose 2.2% ahead of upcoming earnings, where sector profits are forecast to grow 6.7% year on year. Investors now look to Friday’s nonfarm payrolls for guidance on the Federal Reserve’s 2026 policy trajectory.

Asian Market Summary

Asian equity markets traded mixed, but defence stocks rallied for a second consecutive session as investors assessed geopolitical risk following the US capture of Venezuela’s ousted president, Nicolas Maduro. Japanese names Kawasaki Heavy Industries and IHI gained over 3%, while Korea Aerospace rose as much as 11%. China’s NFRA has asked major lenders to review Venezuela-related exposures, heightening risk oversight. Elsewhere, Indonesia reported a narrower-than-expected November trade surplus, while Vietnam’s economy expanded 8% in 2025 on resilient exports to the US despite tariff headwinds, reinforcing regional trade divergence.

Commodity Market Summary

Oil prices declined as traders priced in the prospect of higher Venezuelan supply following the US capture of President Nicolas Maduro, increasing the likelihood of sanctions relief and renewed production growth. This adds to consensus expectations of ample global supply and softer demand into 2026. In precious metals, gold extended gains to a one-week high as dovish Federal Reserve commentary reinforced rate-cut expectations, while geopolitical tensions supported safe-haven interest. Markets will watch upcoming US policy developments and any indication of supply normalisation from Venezuela for direction.

Currency Market Summary

The South African rand held steady as investors assessed the geopolitical implications of US military action in Venezuela, with elevated risk aversion supporting safe-haven flows. South Africa has called for an urgent UN Security Council session in response to the strike. The US dollar traded near a two-week high in Asian trade, with the dollar index at 98.36, as earlier jitters eased and dovish remarks from Federal Reserve officials encouraged risk-taking on Wall Street. Nevertheless, weaker US manufacturing data and rising policy-easing expectations continue to moderate upside momentum in the greenback.

Alphamin Resources Corporation (APH) +1.37%

Alphamin Resources announced that non-executive director Paul Baloyi will step down from the board with effect from 31 January 2026. Baloyi has served since April 2017 as a nominee of the Industrial Development Corporation of South Africa, contributing during a period in which Alphamin consolidated its position as a leading global tin producer. The company’s board expressed appreciation for his service and guidance. The announcement does not indicate any governance concerns and continuity is expected, with Alphamin maintaining strategic focus on operational delivery and capital discipline across its portfolio.

Astoria Investments Limited (ARA) 0.00%

Astoria Investments announced the results of its voluntary offer and proposed delisting, with shareholders tendering 22,604,934 shares, representing 36.42% of the Offer Shares. As the Maximum Acceptances Condition has been met, the offer and delisting will proceed in line with the published timetable. Offer consideration will be settled via electronic transfer to certificated shareholders and credited to dematerialised shareholders’ accounts on the payment date. Trading in Astoria shares on both the JSE Alternative Exchange and the SEM will be terminated following implementation. The company currently holds primary listings on both exchanges.

Samsung Electronics Company Limited (005930) +7.47%

Samsung Electronics is expected to report a c.160% year-on-year rise in fourth-quarter operating profit to about KRW 16.9 trillion, driven by a sharp rebound in memory pricing amid surging global demand for AI infrastructure. Supply constraints linked to the industry’s pivot toward AI-related chips have tightened availability of traditional DRAM, with DDR5 prices reportedly up more than 300% year-on-year. Some analysts see upside risk to consensus above KRW 20 trillion. The recovery marks a decisive turnaround from last year’s earnings slump, with Samsung shares rising 125% in 2025.

Hon Hai Precision Industry Company Limited (2317) +1.08%

Foxconn reported record fourth-quarter revenue of T$2.60 trillion, up 22.1% year on year and ahead of consensus, driven by strong demand for AI-related cloud and networking products. AI server shipments offset softer seasonal trends in consumer electronics, with iPhone-related revenue slightly weaker due to currency effects. On a US dollar basis, revenue rose 26.4%, while December sales reached a record T$862.86 billion. Management expects first-quarter performance to track toward the upper end of historical ranges, supported by continued AI infrastructure investment. Foxconn shares rose 25% in 2025, broadly matching the Taiwan market.

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