Synopsys drops over 18% after-hours on Q3 miss and China headwinds, but Q4 outlook and Ansys deal signal rebound potential

South Africa

The Top 40 index added 0.48% yesterday to reach 95,844.9 points, while the All Share index gained 0.44% to close at 103,227.7 points. Deputy Finance Minister David Masondo signalled a narrowing of South Africa’s inflation target band (currently 3%–6%), with technical work by Treasury and the SARB supporting a shift towards a more credible 3% anchor. Q2 GDP growth of 0.8% beat expectations, though remains insufficient to address structural unemployment and inequality. A coalition-led reform drive is gaining traction, supported by global investor interest. Walmart’s entry into the South African market and Nissan’s strategic reaffirmation highlight multinational confidence. Upcoming data on mining, manufacturing, and the current account will be closely watched amid a stabilising rand and subdued inflation outlook.

Europe

European equities ended flat, with the STOXX 600 up 0.09%, as gains in basic resources and oil stocks offset French political instability. Anglo American’s merger activity and higher oil prices lifted the SXPP and SXEP indices by 1.3%. However, the CAC 40 saw muted gains, and bond markets reflected nervousness after PM Bayrou’s ouster raised fiscal risks. The widening French-German bond spread underscores investor anxiety as Macron seeks a fifth PM in two years. Focus now shifts to the ECB’s rate decision and US inflation data. Financial services underperformed, giving back prior-session gains on macro uncertainty. 

United States

US equities reached fresh record highs, driven by softer jobs data and optimism around AI. A major payrolls revision revealed 911,000 fewer jobs created than previously reported, fuelling expectations of imminent Fed rate cuts. The S&P 500, Nasdaq, and Dow all closed at record levels. Futures markets now fully price in a 25 bps cut next week, with a 10% chance of a 50 bps move. Sectoral strength was led by communication services and utilities. Upcoming PPI and CPI data will be key in assessing the inflationary impact of tariffs and guiding the Fed’s path forward.

Asia

Asia-Pacific markets advanced as weak Chinese inflation data reinforced expectations of policy support. August CPI fell 0.4% y/y, while PPI dropped 2.9%, indicating persistent deflationary pressures. Calls for Beijing to stimulate domestic demand and counter export weakness are intensifying. Tech stocks outperformed, buoyed by Apple’s new product launches and continued strength in Apple suppliers. Alibaba gained for a fourth session, nearing a four-year high, following a $100 million AI investment led by Alibaba Cloud. Investors continue to monitor policy signals from China amid macro softness and global supply chain recalibration.

Commodities

Oil prices edged higher following Israeli strikes on Hamas leadership in Qatar and renewed US calls for Europe to impose tariffs on Russian oil buyers, including China and India. Both Brent and WTI spiked nearly 2% intraday but pared gains after the US assured Qatar such strikes wouldn’t recur. Market upside remains capped by weak demand outlooks and broader macro uncertainty. Trump’s call for 100% EU tariffs on Chinese and Indian oil imports is viewed as a geopolitical tactic to pressure Russia, with potential ripple effects on global trade dynamics and energy pricing.

Currencies

The South African rand held firm despite stronger-than-expected GDP data, as global sentiment remains the primary driver. The US dollar maintained gains ahead of key inflation prints that could shape Fed policy. Following last week’s soft payrolls data, markets have fully priced a 25 bps cut at next week’s Fed meeting, with a 5% chance of a 50 bps move. Traders anticipate 66 bps of total easing in 2025. Direction now hinges on the upcoming PPI and CPI reports, which will offer insight into the inflationary effects of new tariff regimes and global supply chain pressures.

SPAR Group Limited (SPP) +5.85%

SPAR Group Ltd has concluded the sale of its entire stake in SPAR Switzerland to Tannenwald Holding AG for CHF 46.5 million (~R1.025 billion), with potential earn-out payments of up to CHF 30 million (~R660 million) based on FY26–27 EBITDA. The buyer assumed all third-party debt, and SPAR’s cross-border guarantees have been released. The transaction, effective 8 September 2025, improves SPAR’s balance sheet and strategic focus by exiting a non-core geography. An additional CHF 31 million outflow included provisions for a CHF 11.5 million COMCO fine, settling outstanding liabilities and enabling a clean operational exit from Switzerland.

Super Group Limited (SPG) -0.28%

For the year ended 30 June 2025, Super Group unlocked R7.47 billion through the sale of SG Fleet, distributing R5.54 billion via a special dividend. This drove a 2,616.7% surge in dividend per share to 1,630 cents (2024: 60 cents). Despite this, revenue declined 1.4% to R44.51 billion, and EBITDA fell 2.4% to R3.68 billion. Operating profit declined 8.9% to R1.87 billion. EPS and HEPS declined by 4.1% and 1.2% respectively. Notably, net tangible asset value per share rose 281.4% to R26.32, reflecting a significantly strengthened balance sheet post-disposal.

Wilson Bayly Holmes–Ovcon Limited (WBO) -1.43%

WBHO delivered a strong performance for the year ended 30 June 2025, with revenue from continuing operations up 4% to R28.5 billion and operating profit rising 13% to R1.4 billion. EPS from continuing operations increased 24% to 2,299 cents, while HEPS rose 13% to 2,278 cents. Total operations EPS and HEPS grew to 2,357 and 2,337 cents respectively. The Group’s net asset value strengthened to R5.6 billion, supported by a robust order book of R37.6 billion. A final cash dividend of 320 cents per share was declared, up 39% year-on-year, reflecting enhanced profitability and capital discipline.

Oracle Corporation (ORCL) +1.27%

Oracle reported first-quarter RPO of $455 billion, a 359% year-on-year surge, with booked Oracle Cloud Infrastructure (OCI) revenues expected to surpass $500 billion in the long term. OCI revenue is forecast to grow 77% to $18 billion this fiscal year, rising to $144 billion over four years. Four new multi-billion-dollar contracts underpinned the momentum. Q1 revenue rose 12% to $14.93 billion. For Q2, Oracle anticipates total revenue growth of 12–14% and cloud revenue growth of 32–36%. Shares soared 27% after-hours and are up over 107% YTD, reflecting strong investor confidence in Oracle’s cloud growth trajectory.

GameStop Corporation (GME) +1.59%

GameStop delivered a strong Q2, with revenue rising 22% to $972.2 million (Q2 2024: $798.3 million), fuelled by a 63% surge in collectibles and 31% growth in hardware/accessories sales. Net income climbed to $168.6 million (2024: $14.8 million). The retailer’s strategic pivot to digital sales and operational rationalisation, including store closures and balance sheet optimisation via bitcoin holdings, is improving profitability. Shares rose 4% post-market. While competition from e-commerce remains intense, GameStop's evolving model is starting to reflect positively in its financial results, positioning the company for a more resilient footing in the shifting retail landscape.

Synopsys Inc. (SNPS) -0.77%

Synopsys missed Q3 expectations, reporting revenue of $1.74 billion vs. $1.77 billion consensus, with adjusted EPS of $3.39 (vs. $3.74 est.). Weakness in the Design IP segment—impacted by missed deals, new China export controls, and customer-specific issues—drove the underperformance. Shares fell nearly 18.5% after-hours. Despite this, Synopsys completed its $35 billion acquisition of Ansys in July, marking a major strategic milestone following regulatory hurdles. For Q4, revenue guidance of $2.23–$2.26 billion exceeds consensus ($2.09 billion), suggesting a rebound. Investors remain cautious as regulatory and macro headwinds persist, particularly in China-facing revenue streams.

Do you prefer a full in-depth report you can read offline? Click here to download the full report.