Airbnb topped estimates as travel demand remained strong

Market Commentary

South African Market Summary

South African equities ended marginally lower on Thursday, with the JSE All Share slipping 0.09% to 115,306.31 and the Top 40 easing 0.11% to 107,258.37. Corporate updates were mixed. Quilter reported record first-half core net inflows of £6.0 billion, up 32%, reflecting continued strength in its wealth-management platform. Pick n Pay recorded 2.7% group turnover growth for the 20 weeks to 19 July, supported by Boxer’s stronger performance as its core supermarket business remained under pressure. Sappi delivered a weaker third quarter, with revenue broadly stable but adjusted EBITDA falling 34% to US$53 million, while EBITDA excluding special items swung to a US$99 million loss.

European Market Summary

European equities closed at a record high for a third consecutive session on Thursday, with the STOXX 600 rising 0.2% to 658.19 as investors balanced strong corporate earnings against uncertainty surrounding US-Iran negotiations. Second-quarter earnings expectations have improved materially, with STOXX 600 profits now forecast to rise nearly 21%, compared with about 12.5% expected in early May. German industrial orders increased 3.1% month-on-month in June, well above forecasts, although analysts cautioned that large orders distorted the underlying picture. Merck KGaA raised its 2026 profit guidance, while Siemens reported record quarterly industrial profit and lifted its full-year outlook on strong AI-related demand.

US Market Summary

US equities ended lower on Thursday, pausing after record highs earlier in the week as investors assessed corporate earnings and prospects for a US-Iran peace agreement. Strong results across several sectors have helped offset concerns over elevated AI-related capital spending, while easing geopolitical risk had supported sentiment earlier in the week. SpaceX bucked the broader decline, rising 6.1% despite the expiry of its insider lock-up period. Weekly jobless claims increased modestly, adding to investor caution ahead of Friday’s July nonfarm payrolls report. The labour-market data will be closely watched for its implications for the Federal Reserve’s September policy decision and the outlook for US interest rates.

Asian Market Summary

Asian equities traded cautiously on Friday as investors awaited US nonfarm payrolls data that could influence the Federal Reserve’s September rate decision, while rising oil prices reinforced concerns over unresolved Middle East tensions. Japan’s household spending fell 3.3% year-on-year in June, marking a seventh consecutive decline and missing expectations for a 1% increase, while monthly spending dropped 6.4%. The weakness points to continued pressure on Japanese consumption as geopolitical uncertainty weighs on sentiment. In China, July exports rose 23.9% from a year earlier, beating expectations despite slowing from June, while imports increased 27.5%, indicating continued resilience in external trade and domestic demand.

Commodity Market Summary

Gold prices strengthened on Friday and were on course for their largest weekly gain since January, supported by lower oil prices earlier in the week and cautious positioning ahead of the US nonfarm payrolls report. Oil, however, resumed its advance as uncertainty surrounding the Strait of Hormuz intensified. Brent moved back above US$80 after Iran proposed restrictions and potential fees on vessels deemed hostile, complicating efforts to reopen the key energy transit route. Questions also remain over the practicality of any arrangement given US sanctions and insurance constraints. Regional tensions were further reinforced by reported Houthi attacks in Yemen, keeping geopolitical risk firmly embedded in energy markets.

Currency Market Summary

The South African rand was broadly steady as competing global forces shaped currency markets. Lower oil prices provided support for the rand, although the dollar strengthened as uncertainty surrounding a potential US-Iran peace agreement increased demand for safe-haven assets. The greenback also benefited from higher US Treasury yields after reports suggested Federal Reserve Chair Kevin Warsh could support a September rate increase if incoming data remain firm. Attention now turns to the US payrolls report, which could influence expectations for the Fed’s next policy move. Geopolitical risk remains elevated as markets assess proposals concerning the reopening of the Strait of Hormuz and the extent of Iran’s potential control over inbound traffic.

Domestic Company News 

Quilter PLC (QLT) -3.29%
Quilter delivered a strong first half, with core net inflows rising 32% to a record £6.0 billion, equivalent to 9% of opening assets under management and administration on an annualised basis. Total AuMA increased 11% to £157.4 billion, supported by £5.8 billion in reported net inflows and positive market movements. Revenue grew 12% to £379 million, while adjusted profit before tax advanced 12% to £112 million despite a 13% increase in costs linked to strategic investment. The operating margin remained stable at 30%, while adjusted diluted earnings per share increased 13% to 6.1p. Quilter also raised its interim dividend by 5% to 2.1p per share.

Montauk Renewables Inc. (MKR) +0.65%
Montauk Renewables reported a stronger first half, with revenue increasing 14.5% to US$100.4 million for the six months ended June. EBITDA rose 85.4% to US$21.1 million, indicating a marked improvement in operating performance and profitability. Headline earnings recovered to US$1.1 million from a US$4.0 million loss a year earlier, while headline earnings per common share improved to US$0.01 from a US$0.03 loss. Net asset value per share increased 3.9% to US$1.85. Despite the improved earnings profile, the board elected not to declare a dividend, retaining financial resources to support continued development across the company’s operating portfolio and future growth projects.

Pick n Pay Stores Limited (PIK) +0.26%
Pick n Pay reported 2.7% group turnover growth for the 20 weeks ended 19 July, with like-for-like sales up 2.5%. Pick n Pay South Africa turnover declined 0.4% following planned store closures and conversions, although company-owned supermarkets delivered 3.3% like-for-like growth. Boxer remained the strongest contributor, with turnover increasing 7.2%, while online sales advanced 37.5% as demand through asap! and Mr D continued to expand. Internal selling price inflation moderated to 1.3%, below food CPI of 2.5%. Management noted improving supermarket and clothing momentum but cautioned that the turnaround remains dependent on executing operational initiatives and concluding the ongoing Section 189A consultation process.

Sappi Limited (SAP) +12.56%
Sappi reported a weaker third quarter as profitability remained under pressure despite broadly stable revenue. Revenue increased 1% to US$1.33 billion, but adjusted EBITDA fell 34% to US$53 million, while EBITDA excluding special items swung to a US$99 million loss from a US$71 million profit a year earlier. The group recorded a quarterly loss of US$181 million compared with US$33 million previously, with headline losses widening to US27 cents per share. For the nine months, revenue declined 2% to US$3.96 billion and adjusted EBITDA halved to US$195 million. Net debt increased 3% to US$2.0 billion, while net asset value per share declined 28% to US$2.94.

Global Company News

Airbnb Inc. (ABNB) -0.56%
Airbnb reported stronger-than-expected second-quarter results as global travel demand and FIFA World Cup activity supported bookings. Revenue rose 16% to US$3.61 billion, ahead of the US$3.57 billion consensus estimate, while earnings per share increased to US$1.37 from US$1.03 a year earlier. Nights and seats booked grew 10% to 148.3 million, with North American bookings recording their strongest growth in nearly three years. The company also raised its 2026 revenue growth outlook to at least the mid-teens. Expansion into hotels and travel services continued, with hotel nights growing almost three times faster than home stays, while management highlighted potential acquisition opportunities supported by strong cash generation.

Cloudflare Inc. (NET) -2.91%
Cloudflare raised its full-year outlook after second-quarter results exceeded market expectations, supported by growing demand for its network, cloud and security products as AI-agent traffic expands. Revenue increased to US$696.1 million, ahead of the US$665.5 million consensus estimate, while adjusted earnings of US$0.29 per share also beat forecasts. Management lifted 2026 revenue guidance to US$2.86–US$2.87 billion from US$2.805–US$2.813 billion and raised adjusted earnings guidance to US$1.25–US$1.26 per share. Third-quarter revenue is expected at US$736–US$737 million, above consensus. The stronger outlook follows an AI-led restructuring announced in May that included plans to reduce the workforce by roughly 20%.

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