Levi Strauss Jumps 7% on Strong Q2, Raised Outlook

Local Market Commentary

The Top 40 and All Share indices both lost 0.15% on Friday, closing at 89,403.1 points and 97,221.6 points, respectively. In other news, South African President Cyril Ramaphosa placed Police Minister Senzo Mchunu on immediate leave of absence following accusations of colluding with a criminal syndicate and interfering in high-profile investigations. Mchunu denied the allegations, stating they were baseless. Meanwhile, the Financial Sector Conduct Authority scored a legal victory against short seller Viceroy Research over "false" statements about Capitec in 2018. The regulator scored a legal victory last week when the high court ruled it was within the regulators’ province to pursue and fine Viceroy.

European Market Commentary

European shares closed lower on Friday, with the pan-European STOXX 600 index down 1%, snapping a four-day win streak. Losses in banks and healthcare stocks weighed heavily, amid US President Donald Trump's tariff announcements. The EU is awaiting a letter on levies from Trump, and months of difficult talks have led to the realisation that a comprehensive trade agreement may not be feasible. Britain's labour market cooled sharply in June, with the number of people available for work jumping at the fastest pace since the COVID-19 pandemic.

US Market Commentary

Wall Street ended lower on Friday, with Meta Platforms weighing on the S&P 500 after President Trump's intensified tariff offensive against Canada. Trump announced plans to impose a 35% tariff on imports from Canada and blanket tariffs of 15% or 20% on most other trading partners. A rally that took US stocks to record highs will be tested in the coming week by corporate earnings season and a key inflation report. The consumer price index for June is expected to increase 0.3% on a monthly basis.

Asia Market Commentary

China's exports regained momentum in June, rising 5.8% year-on-year, beating the median forecast. Imports rebounded as exporters rushed out shipments to capitalise on a fragile tariff truce between Beijing and Washington ahead of a looming August deadline. Trade ties appeared to have stabilised in June after US and Chinese negotiators agreed to revive a fragile truce reached during talks in Geneva in May.

Currency Market Commentary

The South African rand depreciated against the US dollar on Friday as Trump's tariff threats sparked global market uncertainty. Trump's proposed tariffs, including a 50% levy on copper imports, could severely impact South Africa, a key copper producer. The rand's sensitivity to global risk sentiment and commodity prices adds to its volatility. Meanwhile, the euro and Mexican peso also faced pressure after Trump announced plans to impose a 30% tariff on imports from the European Union and Mexico, starting August 1. This move has raised concerns about escalating global trade tensions and potential economic fallout.

Commodity Market Commentary

Gold prices touched a three-week high on Monday, supported by safe-haven demand after U.S. President Donald Trump threatened to impose a 30% tariff on imports from the European Union and Mexico. Oil prices nudged higher on Monday, adding to gains of more than 2% from Friday, as investors eyed further U.S. sanctions on Russia that may affect global supplies, but a ramp-up in Saudi output and ongoing tariff uncertainty limited gains.

PSG Financial Services Limited (KST) +1.38%

PSG Financial Services has received its fifth rating upgrade in the last ten years from Global Credit Rating Company (GCR), with its national scale long-term issuer rating upgraded to AA-(ZA) from A+(ZA) and short-term issuer rating to A1+(ZA) from A1, carrying a Stable Outlook. This upgrade reflects PSG's sound performance against market indices and peers, sustained growth in assets under management, and improvement in its competitive profile, driven by its performance and brand recognition that continues to attract net inflows in a market with constrained growth.

Schroder European Real Estate Investment Trust PLC (SCD) 0.00%

Schroder European Real Estate Investment Trust's property portfolio was valued at €193.9 million as of June 30, 2025, with resilient total portfolio values. The industrial portfolio saw robust valuations, particularly in France and the Netherlands, which offset declines in the office portfolio, mainly in Paris, and the alternatives portfolio. A notable uplift was seen in the Berlin DIY asset, valued €1.0 million higher due to a successful 12-year lease extension with Hornbach, the second-largest tenant. The company has also changed its valuers from Knight Frank to Savills effective June 30, 2025.

Norwegian Air Shuttle ASA (NAS) +10.81%

Norwegian Air reported Q2 earnings exceeding market expectations, driven by strong demand in June, with record passenger numbers and load factor since the pandemic. The airline's operating profit (EBIT) reached 1.25 billion NOK ($124 million), surpassing the consensus estimate of 1.04 billion NOK. Consequently, shares rose nearly 8% as the company announced its first dividend payment in 23 years, set at 0.90 NOK per share. Norwegian's CEO highlighted the quarter's exceptional performance, with the second-highest operating profit and margin ever recorded in Q2. The company expects unit costs (ex-fuel) to increase by a low-to-mid single-digit percentage compared to 2024, slightly lower than previous guidance.

Levi Strauss & Company (LEVI) +11.25%

Levi Strauss shares surged 7% after the company raised its annual revenue and profit forecasts, driven by strong demand at its stores and website. The denim maker's direct-to-consumer strategy and focus on core products led to a second-quarter sales and profit beat. Analyst Dana Telsey called the results "impressive" and noted the raised forecast's inclusion of estimated tariff impacts. Levi's stock trades at 14.92x forward earnings, compared to 20.32x for Ralph Lauren and 8.46x for Abercrombie & Fitch.

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