Moderna pivots overseas to revive growth after U.S. setbacks

South African Market Summary

The JSE All Share index declined 1.33% to 120,584.07 points, while the Top 40 fell 1.45% to 112,558.10, led by a 2.42% drop in the Resources 10 index amid commodity pressure. Rate expectations remain supportive, with economists forecasting up to three additional 25bps SARB cuts to a 6% terminal rate, reinforcing a gradually easing monetary backdrop. Attention this week turns to key domestic data, including Q4 unemployment, January inflation and December retail sales, which will provide critical insight into demand resilience and the trajectory of policy easing.

European Market Summary

European equities edged lower, with the STOXX 600 declining 0.13% to 617.7, as investors balanced AI-driven disruption risks against mixed earnings and macro data. Labour market dynamics remain in focus, with rising youth unemployment in the UK partly attributed to higher minimum wages, though not yet signalling broader deterioration. Policy developments also remain supportive, with Ukraine securing progress on an $8.2 billion IMF programme, unlocking broader international funding. Overall, markets continue to navigate a complex mix of structural shifts, uneven growth signals and evolving policy support across the region.

US Market Summary

US equities closed mixed, with the S&P 500 marginally higher while the Nasdaq declined as technology stocks faced renewed pressure from AI-driven disruption concerns. Softer-than-expected inflation data supported sentiment and lifted expectations for a June rate cut to above 50%, reinforcing a more accommodative policy outlook. However, volatility persists amid uncertainty around capital expenditure requirements and earnings sustainability in the technology sector. Focus this week shifts to key data releases, including GDP and PCE inflation, alongside major earnings, which will test the durability of recent market rotation trends.

Asian Market Summary

Asian markets consolidated recent gains amid thin trading conditions, while weaker-than-expected Japanese GDP data weighed on sentiment. Japan’s economy grew an annualised 0.2% in Q4, significantly below expectations, highlighting fragile domestic demand and limited recovery momentum. Policymakers face a complex backdrop, balancing fiscal support initiatives with the Bank of Japan’s gradual policy normalisation. The data underscores ongoing challenges in consumption, investment and export performance, raising questions around the sustainability of Japan’s recovery and broader regional growth dynamics in a tightening monetary environment.

Currency Market Summary

The rand weakened amid softer commodity prices and stronger US labour data, which reduced expectations for near-term Federal Reserve rate cuts and supported the dollar. The dollar index remained steady at 96.959 after recent declines, reflecting a more balanced policy outlook. The yen softened following prior gains, as fiscal concerns eased. Market liquidity is expected to remain thin due to multiple regional holidays, potentially amplifying volatility. Currency markets remain highly sensitive to rate expectations, commodity movements and global risk sentiment in the near term.

Commodity Market Summary

Oil prices traded broadly sideways as geopolitical tensions between the US and Iran provided support, while expectations of OPEC+ supply increases from April capped upside. Renewed diplomatic engagement between Washington and Tehran remains a key near-term catalyst for supply dynamics. Meanwhile, gold advanced 2.44% as investors sought safe-haven exposure amid geopolitical uncertainty and shifting rate expectations. Commodity markets continue to balance supply-side policy signals with macroeconomic and geopolitical developments, reinforcing a relatively range-bound but event-sensitive trading environment.

Cell C Holding Limited (CCD) -2.55%

Cell C reported a transitional first-half performance following its listing, reflecting the final stages of its restructuring and shift to a capital-light operating model. Revenue increased 1.8% year on year to R5.68 billion, supported by strong data traffic growth of 42.7%, while adjusted EBITDA declined marginally to R917 million. The balance sheet reset materially reduced risk, with net debt at R2.4 billion. Subscriber growth remained stable at 8.63 million, complemented by MVNO expansion. Management highlighted accelerating wholesale-driven diversification and improved network performance, positioning the group for scalable, capital-efficient growth.

Mustek Limited (MST) +4.45%

Mustek expects a materially stronger first-half performance, with headline earnings per share projected to increase between 250% and 270% to 82.13–86.83 cents, supported by lower finance costs, favourable foreign exchange movements and disciplined cost control. Basic earnings per share is anticipated to rise by 255% to 275% over the same period. Improved contributions from equity-accounted investments further supported earnings momentum. Net asset value per share is expected to strengthen to between 2,920 and 2,940 cents, reflecting an improved balance sheet position and enhanced underlying profitability relative to the prior period.

KAP Limited (KAP) +3.56%

KAP expects a solid first-half earnings recovery, with EPS projected at 20.1–21.3 cents (+24% to +31%) and HEPS at 22.0–23.2 cents (+28% to +35%), supported by operational improvements and lower finance costs. Performance gains were driven by stronger volumes at PG Bison and Feltex, benefiting from increased production and higher domestic vehicle assembly. These positives were partially offset by continued weakness in Safripol amid a cyclical downturn in polymers. The group’s improving earnings trajectory reflects operational leverage and a more favourable interest rate environment ahead of interim results due in February 2026.

NatWest Group Plc (NWG) -2.49%

NatWest reported a strong FY2025 performance, with pretax profit rising 24% to £7.7 billion, marginally ahead of expectations, and upgraded its medium-term profitability targets, now guiding to a return on tangible equity above 18% by 2028. The results underscore the group’s transition to a more focused, domestically driven and capital-efficient model. Strategic momentum is increasingly centred on wealth management, highlighted by the £2.7 billion acquisition of Evelyn Partners and 20% growth in assets under management. A £750 million share buyback reinforces capital returns, while sector tailwinds remain supported by resilient credit quality and a stable UK operating backdrop.

Moderna Inc. (MRNA) +5.29%

Moderna is pivoting towards international markets to restore growth after U.S. regulatory setbacks, including the FDA’s refusal to review its experimental flu vaccine. The group expects up to 10% revenue growth in 2026, driven primarily by overseas COVID-19 vaccine demand and government partnerships in key markets. Strategic focus is shifting towards oncology and rare diseases, alongside cost rationalisation efforts. While U.S. policy changes have introduced uncertainty around its respiratory pipeline, upcoming late-stage data on its cancer vaccine programme could act as a key catalyst for sentiment and valuation recovery.

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