Ferrari unveils €550,000 Luce EV in bold push into luxury electric market

Market Performance

South African Market Summary

South African equities advanced strongly, with the JSE All Share index rising 2.45% to 115,994.17 points and the Top 40 gaining 2.65% to 108,174.91 points. Investor focus now shifts to Thursday’s South African Reserve Bank interest rate decision, alongside key domestic data releases, including the leading business cycle indicator on Tuesday and producer inflation on Thursday. Corporate attention also centred on Pick n Pay, after the retailer pushed out its target for break-even trading profit in its core Pick n Pay business to FY2029 from FY2028. The delay highlights the scale of the turnaround challenge, with the segment’s trading loss after lease interest widening to R2 billion, partly due to elevated labour costs.

European Market Summary

European equities closed at their highest level in more than two months, with the STOXX 600 rising 1.0% to 631.63 points and moving to within 1% of its February record high. Sentiment improved as investors priced in growing prospects of a US-Iran peace deal and a potential framework to reopen the Strait of Hormuz, easing concerns over energy supply disruption. Enthusiasm around artificial intelligence-linked companies also supported risk appetite, although Europe continues to lag US and Asian peers due to its smaller AI exposure and sensitivity to energy-driven inflation. Investor attention now turns to inflation releases from major eurozone economies, with markets expecting two 25-basis-point European Central Bank rate increases before year-end.

US Market Summary

US markets were closed yesterday for Memorial Day.

Asian Market Summary

Asian markets drew support from renewed risk appetite, with South Korea’s Kospi reaching a fresh record as trading resumed after a public holiday. Attention now turns to Thursday’s Bank of Korea decision, where most economists expect rates to remain at 2.50%, although a growing majority now anticipate at least one rate increase by year-end as the Iran war adds to inflation pressure. In Japan, Prime Minister Sanae Takaichi announced plans to build an additional US$19 billion in reserves to subsidise fuel costs and ease cost-of-living pressures, while pledging no overall increase in borrowing. The move reflects rising energy and import costs, compounded by yen weakness. Japan also slipped behind China as the world’s third-largest net creditor.

Commodity Market Summary

Gold weakened on Tuesday as renewed US strikes in Iran pushed oil prices higher, raising concerns over inflation and the prospect of higher-for-longer interest rates. Oil advanced as investors balanced hopes for a possible US-Iran peace deal against fresh military action in the Middle East. Iran’s top negotiator and foreign minister reportedly held talks in Doha with Qatar’s prime minister over a potential agreement to end the war, although Washington and Tehran played down expectations of an imminent breakthrough. Separate reports suggested both sides were discussing a plan to reopen the Strait of Hormuz roughly 30 days after a deal. However, sentiment remained fragile after US forces targeted Iranian boats and missile launch sites.

Currency Market Summary

The South African rand strengthened in early trade on Monday, supported by easing oil prices and improved emerging-market sentiment as investors assessed prospects for progress in US-Iran peace negotiations. The move came ahead of a key domestic interest rate decision later in the week, which remains central to the local market outlook. The dollar remained under pressure on Tuesday as optimism grew around a possible agreement to reopen the Strait of Hormuz and end the three-month Iran war, although fresh US attacks on Iranian targets limited risk appetite. The euro held firm at $1.16365, while the yen traded at 158.95 per dollar. Softer oil prices below $100 a barrel helped ease pressure on risk-sensitive currencies.

Domestic Company News

Hosken Consolidated Investments Limited (HCI) +1.16%

Hosken Consolidated Investments expects a mixed earnings performance for the year ended 31 March 2026, with basic earnings per share set to fall sharply while headline earnings improve materially. The group expects basic EPS of between 1 662.8 cents and 3 325.5 cents, representing a decline of 60% to 80% from 8 313.8 cents previously. The decrease reflects the absence of the prior year’s R4.55 billion upward fair value adjustment recognised when HCI gained control of Impact Oil and Gas in July 2024. Headline EPS is expected to rise 45% to 55% to between 2 174.3 cents and 2 324.3 cents, supported by reduced losses from Impact Oil and Gas and Africa Energy Corp. Results are due around 26 May 2026.

Omnia Holdings Limited (OMN) +0.38%

Omnia expects stronger earnings for the year ended 31 March 2026, supported by the continued execution of its strategy, solid cash generation and an improved financial performance. The group expects total earnings per share to increase by 21% to 27%, from 692 cents previously to between 837 cents and 879 cents. Total headline earnings per share is expected to rise by 17% to 23%, from 704 cents to between 824 cents and 866 cents. Omnia said its stronger operating performance underpinned a robust financial position, with net cash of R1.68 billion at year-end, excluding IFRS 16 lease effects, compared with R1.77 billion a year earlier. The results remain subject to final year-end adjustments and are expected on 8 June 2026.

Pick n Pay Stores Limited (PIK) -4.79%

Pick n Pay reported a modest recovery for the 52 weeks ended 1 March 2026, although its core turnaround remains under pressure. Group turnover rose 3.4% on a comparable 52-week basis to R120.3 billion, supported by Boxer’s 12.3% growth, while Pick n Pay turnover declined 1.6% due to its store estate reset. Trading profit fell 4.2% to R1.69 billion, as Boxer’s stronger contribution was offset by a wider Pick n Pay trading loss. The group reduced its headline loss to R386 million from R408 million, while loss per share improved to 99.17 cents. Post year-end, Pick n Pay sold 12.5% of Boxer for R4.7 billion to fund its turnaround, with break-even targeted for FY29.

Netcare Limited (NTC) +7.14%

Netcare delivered a stronger interim performance for the six months ended 31 March 2026, supported by improved operating leverage and solid earnings growth. Revenue increased 4.8% to R13.28 billion, while EBITDA rose 6.6% to R2.50 billion and operating profit advanced 7.4% to R1.79 billion. Profit for the period increased 11.9% to R924 million. Basic earnings per share rose 19.1% to 70.6 cents, while headline earnings per share increased 21.2% to 71.6 cents. Adjusted headline earnings per share grew 21.9% to 71.7 cents, reflecting a healthier underlying performance. Netcare declared an interim dividend of 44.0 cents per share, up 22.2% from the prior period, payable to eligible shareholders in July 2026.

Global Company News

Ferrari NV (RACE) +2.80%

Ferrari presented its first fully electric car, the Luce, marking a significant strategic shift as several luxury rivals scale back electric-vehicle ambitions amid softer demand. The four-door, five-seat model, developed with input from former Apple design chief Jony Ive and LoveFrom, is priced at €550,000, with deliveries expected from the fourth quarter of 2026. Ferrari is targeting affluent families seeking high-end technology, practicality and distinctive luxury, including a 600-litre boot and more than 500 kilometres of range. The Luce uses four electric motors to deliver over 1,000 horsepower and a top speed above 310kph, while amplified powertrain vibrations aim to preserve Ferrari’s emotional appeal. The launch could support expansion in EV-focused markets such as China over time as well globally.

Alphabet Inc. Class A (GOOGL) -1.21%

Alphabet’s Google could face a high triple-digit million euro fine from the European Union as part of an antitrust investigation into its search practices, according to Germany’s Handelsblatt. The decision is reportedly close to completion and may be announced before the summer break, potentially marking the EU’s largest penalty under the Digital Markets Act. The probe, launched in March 2025, centres on concerns that Google favours its own services in search results and whether the company is complying with EU digital competition rules. The European Commission said its priority remains securing compliance, although it is prepared to escalate if required. Google has criticised the DMA-related changes, arguing they have weakened the search experience for European users.

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