Jefferies beats Q4 expectations as dealmaking and underwriting roar back

South African Market Summary

The All Share index fell 0.67% to 117,922.55 points yesterday, while the Top 40 declined 0.78% to 110,023.48 points, with the Resources 10 retreating 1.74% after recent strength. Retail counters outperformed, with Woolworths, Truworths and Foschini among the day’s leaders. OUTsurance confirmed approval for a secondary listing on A2X from 14 January 2026, with its JSE primary listing and issued share capital unchanged. Meanwhile, government relaxed antitrust rules to allow distressed, energy-intensive industries to collaborate on securing cheaper power, offering potential relief to the ferrochrome sector.

European Market Summary

The FTSE 100 declined 0.7% on Wednesday, pausing after recent record highs as energy and financial stocks weakened, while investors monitored geopolitical developments involving the U.S. and Venezuela. The mid-cap FTSE 250 rose 0.4%, trading near a four-year peak. Eurozone inflation eased to 2% in December, with Germany’s rate also slowing more than expected, reinforcing expectations that price pressures will hover around target during 2026. Despite prior trade-related disruptions, euro area consumption has strengthened. In the UK, construction output contracted for a twelfth consecutive month, with the sector PMI at 40.1, indicating continued weakness despite improving forward sentiment.

American Market Summary

The S&P 500 ended lower on Wednesday as declines in JPMorgan, Blackstone and other financials offset gains in AI-exposed names such as Nvidia and Alphabet, while the Dow also eased from intraday record highs. Housing acquisition firms sold off after President Trump signalled a ban on institutional purchases of single-family homes, and defence stocks weakened following pressure to halt dividends and buybacks. Labour data showed softer job openings and payrolls but did little to shift expectations for Federal Reserve rate cuts ahead of Friday’s key employment report, while geopolitical risks also remained in focus.

Asian Market Summary

Asia-Pacific equities traded mixed on Thursday after Wall Street weakened amid rising geopolitical tensions and comments from U.S. President Donald Trump. In Japan, real wages fell 2.8% year on year in November, matching January’s sharpest decline since late 2023, as weaker bonus payments and inflation outpacing earnings continued to pressure household purchasing power. This dynamic complicates the Bank of Japan’s commitment to further rate hikes. In Hong Kong, sentiment was supported by strong debuts from three Chinese technology listings, including AI and semiconductor firms, which collectively raised $1.19 billion and traded meaningfully above offer levels.

Currency Market Summary

The South African rand traded softer on Wednesday, pressured by a firmer U.S. dollar and a sharp contraction in the December PMI, marking the steepest fall in local business activity since January 2025. The dollar index held steady around 98.74 on Thursday as investors assessed mixed economic signals ahead of Friday’s key U.S. jobs report. Although the dollar is coming off its weakest annual performance since 2017, analysts still expect a gradual decline this year. Despite heightened geopolitical tensions, including U.S. intervention in Venezuela, currency markets remained broadly stable through the week.

Commodity Market Summary

Oil prices steadied on Thursday after recent declines, while equity markets opened cautiously as investors assessed rising geopolitical tensions and mixed U.S. labour data. The U.S. signalled it intends to maintain long-term control over Venezuela’s oil exports and revenues to shape regional energy dynamics, alongside the seizure of Venezuela-linked tankers, reinforcing supply-side uncertainty. Market attention remains focused on Venezuela following the removal of Nicolas Maduro, with most reaction evident in commodities. Gold retreated more than 1% as investors took profits, though softer U.S. jobs data helped stabilise prices by supporting expectations of Federal Reserve rate cuts.

Hosken Consolidated Investments Limited (HCI) -1.71%

HCI announced that its subsidiary, HCI-Whale Coast Village, has agreed to dispose of its 65% undivided interest in the Whale Coast Village Mall rental enterprise in Sandbaai, Hermanus, for R600 million. The proceeds will be applied to settle approximately R328 million of existing debt, with the balance distributed to shareholders, of which HCI holds 80%. The transaction remains subject to competition authority approval but does not require shareholder approval under JSE categorisation rules. The disclosure has been made on a voluntary basis.

ASP Isotopes Inc. (ISO) +0.40%

ASP Isotopes has completed its acquisition of Renergen Limited, creating a combined critical-materials business focused on isotope production and global helium supply. The transaction integrates ASP Isotopes’ enrichment technologies with Renergen’s Virginia Gas Project in South Africa, which benefits from up to $750 million in committed funding from the U.S. Development Finance Corporation and Standard Bank to expand production. The enlarged group aims to supply high-growth sectors including semiconductors, quantum computing and clean energy, positioning the company to benefit from rising demand and constrained global helium supply.

OUTsurance Group Limited (OUT) -1.80%

OUTsurance Group Limited has announced that its ordinary shares will obtain a secondary listing on A2X with effect from 14 January 2026. The company’s primary listing on the JSE and its issued share capital remain unchanged, with shareholders able to trade the same shares on both exchanges from the A2X listing date. A2X operates as a licensed secondary exchange regulated by the FSCA and the Prudential Authority. The additional listing is expected to enhance liquidity and provide investors with improved trading optionality and cost efficiency.

Jefferies Financial Group Inc. (JEF) -2.40%

Jefferies reported stronger-than-expected fourth-quarter earnings, reflecting a solid rebound in investment-banking activity and robust underwriting revenue. Investment-banking revenue rose 20.4% year on year to $1.19 billion, supported by improved M&A sentiment and renewed corporate confidence. Adjusted net earnings increased to $213.5 million, or $0.96 per share, ahead of consensus. Equity and debt underwriting revenue grew 77.7% and 25.8% respectively, while capital markets revenue increased 6.2%. Despite a $30 million pre-tax loss related to private-credit exposure, management expects momentum to continue as lower rates and a friendlier regulatory environment underpin deal pipelines.

Lockheed Martin Corporation (LMT) -4.82%

Lockheed Martin reported record F-35 deliveries in 2025, supplying 191 aircraft to the United States and allied customers, up from 110 in 2024. The company noted that annual F-35 output is now running at five times the production rate of any other allied fighter programme, reflecting sustained growth in global defence spending amid heightened geopolitical tensions. The F-35 remains a core earnings contributor, accounting for roughly one-third of group revenue, and the step-up in deliveries underscores the programme’s importance to Lockheed Martin’s long-term order visibility and cash-flow generation.

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