Swatch Group to be dropped from Swiss Leader Index as market value slides

South Africa

The JSE Top 40 dropped 1.2% to 101,451.3 points, while the All Share Index declined 1.14% to 108,846.4 points, as investors stayed cautious ahead of Wednesday’s Medium-Term Budget. Net foreign reserves rose to $69.36 billion in October, supported by higher export receipts. TFG reported a 21.3% fall in half-year earnings to 292.6 cents per share as weak consumer demand and higher promotions weighed profits. Attention now turns to jobs, mining, and manufacturing data for growth signals. Tensions rose after President Trump announced the U.S. will boycott the upcoming G20 summit in South Africa.

Europe

European markets ended lower, with the STOXX 600 down 0.6% to 564.79 as tech-sector weakness and political risk dragged sentiment. Siemens Energy and Schneider Electric led declines, while automakers gained on optimism about renewed Chinese chip shipments. Italian banks voiced support for the ECB’s digital euro but urged phased implementation given high costs. In the UK, Halifax data showed house prices rising 0.6% in October—the strongest since January—driven by early demand recovery ahead of Finance Minister Rachel Reeves’ 26 November budget announcement.

United States

U.S. stocks ended mixed after a volatile week dominated by the record-long government shutdown and valuation fears. The S&P 500 and Dow closed marginally higher, while the Nasdaq suffered its biggest weekly drop since April. Consumer sentiment hit a three-year low as economic uncertainty deepened. Tesla shares fell 3.7% after approving Elon Musk’s record pay package, while Expedia surged 17.6% on strong B2B results. Analysts expect S&P 500 earnings growth of 16.8% for Q3, reflecting robust corporate performance despite policy and data headwinds.

Asia

Asian equities opened higher Monday after last week’s tech-driven losses, supported by stronger Chinese inflation data. China’s CPI rose 0.2% year-on-year and PPI fell 2.1%, suggesting easing deflation pressures. The Bank of Japan’s minutes indicated readiness for a near-term rate hike if inflation stays firm. Beijing temporarily lifted its export ban on gallium, germanium, and antimony to the U.S., though licence controls remain. Economists expect further policy easing to boost domestic demand as the region adjusts to slower global trade and manufacturing output.

Commodities

Oil prices firmed Monday on optimism that the U.S. government shutdown may end soon, improving demand outlooks. Brent and WTI both fell 2% last week amid growing supply concerns, despite OPEC+ confirming a minor December output rise. U.S. stockpiles and offshore storage in Asia continued to expand. Lukoil faces disruptions as U.S. sanctions near, while Hungary’s waiver heightened oversupply risks. Gold strengthened as the dollar softened and investors sought safe havens amid global uncertainty and weaker equity sentiment across major Western markets.

Currencies

The rand traded steady Friday as global markets paused after sharp equity corrections. The U.S. dollar index rose 0.2% to 99.74, snapping a three-day decline, as bipartisan progress in Senate talks to end the shutdown boosted sentiment. The euro and yen weakened modestly. Investors remain cautious ahead of key U.S. inflation and employment data, which could guide Federal Reserve policy expectations. Emerging-market currencies, including the rand, are likely to remain range-bound until clearer signals emerge on fiscal direction and global risk appetite.

Foschini Group Limited (TFG) -6.42%

The Foschini Group reported mixed interim results for the half-year ended 30 September 2025. Group revenue rose 12.2% to R31.4 billion, supported by 12.7% sales growth to R29.2 billion (3.5% excluding White Stuff). Online sales surged 55.3%, contributing 14.7% of total retail sales, while TFG Africa’s digital sales advanced 40.2%, driven by the Bash platform. Gross profit increased 12.3% to R14.4 billion, though the gross margin narrowed 20 bps to 49.3%. Operating profit declined 9.9% to R2.3 billion, with EPS and HEPS both down around 21%. Market share in South African apparel was stable, while homeware gained 20 bps. An interim dividend of 130 cents per share was declared, 18.8% lower year-on-year. TFG also repurchased 3.42 million shares for R377 million during the period, reflecting ongoing capital management amid a challenging consumer environment.

ISA Holdings Limited (ISA) -2.86%

ISA Holdings delivered a solid performance for the six months ended 31 August 2025, supported by recurring revenue and robust cash generation. Turnover rose 52% to R68.8 million, driven by strong demand for Managed Security Services and the MSS Pulse platform, alongside several large lower-margin projects. Profit before other income increased 20% to R29.9 million, while profit after tax advanced 11% to R14.6 million, translating to EPS and HEPS of 9.4 cents (up 11%). Gross margin narrowed to 43% from 55%, reflecting project mix. The DataProof associate’s profit contribution fell 31% to R3.8 million, but management expects recovery as diversification efforts take effect. Cash balances increased 17% to R26.3 million, and the board declared an interim dividend of 9.4 cents per share, underscoring continued shareholder returns despite a challenging operating environment.

Sephaku Holdings Limited (SEP) 0.00%

Sephaku Holdings delivered resilient interim results for the six months ended 30 September 2025, supported by improved subsidiary performance despite a weak construction environment. Group revenue rose 8% to R665.1 million, with net profit after tax up 13% to R36.7 million, translating to EPS of 15.93 cents and HEPS of 14.45 cents. Métier Mixed Concrete achieved strong operational gains, lifting EBITDA 42% to R98.1 million (margin 14.8%) and profit after tax 52% to R55.5 million. However, associate Dangote Cement SA reported softer results, with EBITDA down to R110.3 million (margin 9.8%) and a net loss after tax of R31.3 million, resulting in SepHold’s equity-accounted loss of R11.3 million. No dividend was declared. Management emphasised cost discipline, operational efficiency, and selective investment as the Group navigates subdued infrastructure demand and prepares for longer-term recovery in construction materials markets.

Pfizer Inc. (PFE) +0.04%

Pfizer secured a $10 billion acquisition of obesity drug developer Metsera, defeating rival Novo Nordisk after a heated bidding war. Metsera accepted Pfizer’s sweetened $86.25-per-share cash offer, citing lower U.S. antitrust risks than Novo’s competing bid. The deal grants Pfizer entry into the fast-growing obesity-treatment market, positioning it against leaders Novo Nordisk and Eli Lilly. Metsera’s early-stage GLP-1 and amylin-mimicking therapies are forecast to generate up to $5 billion in peak sales. Analysts called the takeover ambitious, highlighting potential long-term strategic value despite near-term development costs and regulatory hurdles.

Peloton Interactive Inc. (PTON) +14.16%

Peloton shares rose 7% after the fitness firm exceeded quarterly revenue expectations, reporting $550.8 million versus forecasts of $539.8 million. The uplift was driven by early success from its refreshed AI-enhanced product lineup and price increases across hardware and subscriptions. Under CEO Peter Stern, Peloton continues its turnaround by focusing on profitability, cash-flow improvement, and operational efficiency. While analysts at J.P. Morgan praised progress on deleveraging, they cautioned on sustaining long-term growth amid weaker discretionary spending. The stock trades at a high P/E of 79.95, reflecting ongoing investor optimism.

Swatch Group Limited (UHR) +2.58%

Swatch Group will be removed from Switzerland’s benchmark Swiss Leader Index (SLI) on 22 December, following a decline in market capitalisation and trading activity. The maker of Omega, Tissot and Longines will be replaced by Helvetia Baloise Holding, newly formed through the merger of Helvetia and Baloise. Swatch shares have fallen 5% over the past year amid weaker sales in China and lower profits, reducing its market value to CHF 8.66 billion. The change follows an extraordinary review by SIX and highlights Swatch’s continued slide in Swiss equity benchmarks.

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