Goldman Sachs beats expectations as dealmaking rebounds and trading hits records

South African Market Summary

South African equities were largely unchanged, with the All Share Index edging up 0.01% to 120,870.11 points, while the Top 40 eased 0.03% to 113,088.50 points. Financials outperformed, advancing 1.58%, while Resources declined 0.47%, pausing a recent strong run. In corporate news, British American Tobacco South Africa announced plans to close its sole local manufacturing facility by end-2026, citing the rapid expansion of the illicit cigarette market, with approximately 230 jobs at risk. Separately, National Treasury invited public comment on proposed legislative amendments aimed at strengthening anti-money laundering and counter-terrorism financing frameworks.

 European Market Summary

European equities advanced to a fresh record high, supported by strength in technology and financial stocks amid positive earnings updates and improving macroeconomic signals. The pan-European STOXX 600 rose 0.5% to 614.57 points, extending gains in seven of the past ten sessions and continuing to outperform the US S&P 500 year to date. Technology shares climbed 2.3%, trading at levels last seen in 2000, while financial services advanced 2.2%. Sentiment was further supported by data showing Germany returned to economic growth in 2025, marking its first expansion in three years and signalling tentative recovery momentum.

American Market Summary

US equities rebounded on Thursday, snapping a two-day losing streak as upbeat earnings from major banks and chipmakers lifted sentiment. Shares of Goldman Sachs and Morgan Stanley advanced sharply following stronger-than-expected quarterly results, driven by renewed dealmaking activity, providing the largest boost to the Dow. Technology stocks also strengthened, led by semiconductors, after TSMC delivered blockbuster results and signalled robust growth alongside expanded US manufacturing capacity. The Philadelphia Semiconductor Index gained 1.8%, with broad-based advances across leading chip names, while softer-than-expected jobless claims reinforced confidence in labour-market resilience as earnings season gathers pace.

Asian Market Summary

Asian equities were mixed on Friday, although markets with heavy semiconductor exposure outperformed as chip stocks rallied. Shares in Taiwan Semiconductor Manufacturing Co advanced after the group delivered another record quarter and signalled a sharp increase in capital expenditure for 2026, reinforcing confidence in sustained AI-driven demand. Elsewhere, India’s trade data highlighted shifting export dynamics, with shipments to China surging in December while exports to the US declined amid steep tariff measures. Elevated US tariffs on Indian goods are prompting New Delhi to diversify trade relationships, reshaping regional trade flows and broader diplomatic positioning.

Currency Market Summary

The South African rand traded largely flat in early Thursday dealings as easing geopolitical concerns supported risk sentiment, following signals from US President Donald Trump that reduced the likelihood of near-term military action against Iran. The US dollar remained firm after stronger-than-expected economic data pushed back expectations for Federal Reserve rate cuts. Fed funds futures now price the next cut around mid-year, reflecting resilient labour-market conditions and persistent inflation concerns. The dollar index was steady at 99.36, on track for a modest weekly gain, while the euro held near $1.1607.

Commodity Market Summary

Oil prices were little changed on Friday, with both Brent crude and WTI consolidating near recent multi-month highs as geopolitical risk premiums eased. Earlier gains driven by unrest in Iran moderated after President Donald Trump signalled reduced prospects of US military action, easing concerns over potential supply disruptions. Sentiment was further tempered by US data showing larger-than-expected rises in crude and gasoline inventories. Longer-term signals remain mixed, with OPEC expecting broadly balanced markets through 2026, while Shell’s latest energy scenarios continue to project robust long-term demand growth. Gold prices softened as a firmer dollar reduced safe-haven demand.

Compagnie Financière Richemont SA (CFR) -4.15%

Richemont reported a strong third quarter to December 2025, with group sales rising 11% at constant exchange rates to EUR 6.4 billion, despite tough prior-year comparatives. Jewellery Maisons remained the primary growth engine, delivering 14% constant-currency growth, while Specialist Watchmakers returned to growth at 7%. Momentum was broad-based across regions, led by the Americas, Japan and the Middle East & Africa, and supported by robust retail demand. Despite currency and cost pressures, the group maintained a solid net cash position of EUR 7.6 billion.

Hyprop Investments Limited (HYP) +0.12%

Hyprop announced the termination of its proposed disposal of a 50% undivided share in Hyde Park Corner after the purchaser failed to fulfil certain conditions precedent, resulting in the lapse of both the initial transaction and the associated option to dispose of the remaining stake. Operationally, the asset continues to show improvement, supported by reduced vacancies, an enhanced tenant mix and the successful opening of Checkers Fresh-X and Al Capone. An integrated battery and solar PV project is also underway, expected to support future operating income.

Goldman Sachs Group Inc. (GS) +4.63%

Goldman Sachs delivered a strong fourth-quarter performance, with earnings per share of $14.01 beating expectations, driven by a sharp rebound in dealmaking and exceptional trading results. Equity trading revenue reached a record, benefiting from heightened market volatility and strong investor engagement around interest-rate expectations and AI-related themes, while fixed income trading also posted solid growth. Investment banking fees rose 25% year on year, reflecting a broad recovery in global M&A and capital markets activity, with Goldman retaining its leading advisory position. Management highlighted a constructive outlook for 2026, supported by a more favourable regulatory environment, lower interest rates and elevated corporate cash balances. Continued expansion in assets and wealth management is improving revenue stability, supporting higher dividends despite rising investment and compensation costs.

Morgan Stanley (MS) +5.78%

Morgan Stanley reported a stronger-than-expected fourth-quarter performance, with earnings per share of $2.68 exceeding consensus forecasts, driven by a sharp rebound in investment banking activity. Investment banking revenue rose 47% year on year, underpinned by a surge in global M&A volumes and a near-doubling of debt underwriting fees, as lower interest rates and AI-driven corporate optimism supported dealmaking. Institutional Securities revenues marginally exceeded expectations, while wealth management delivered robust growth, benefiting from rising markets and strong net asset inflows. Management remains optimistic for 2026, citing a healthy M&A and IPO pipeline, although caution persists around geopolitical risks and a complex macroeconomic environment.

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