In this edition of Lens on Markets, Meta shares rose more than 4% after hours as quarterly revenue reached $64.60 billion
Market Commentary
South African Market Summary
South African equities declined on Wednesday, with the JSE All Share falling 0.67% to 109,657.95 and the Top 40 losing 0.79% to 101,739.26. Bonds rallied after Treasury announced smaller weekly fixed-rate bond auctions and a buyback programme. September inflation rose to 4.5% from 4.4%, below the 4.7% consensus, although fuel costs threaten further acceleration. The Medium-Term Budget Policy Statement lowered projected 2026 growth to 1.2% from 1.6%. Treasury reported that debt stabilised at 78.4% of GDP in 2025/26, with the current-year deficit forecast narrowed to 3.9%. Government announced R10 billion in temporary fuel levy relief commencing 4 November. The 2026/27 gross tax revenue forecast was raised by R17.1 billion against February’s estimate, while economic growth is expected to recover to 1.6% in 2027.
European Market Summary
European equities advanced on Wednesday as strong earnings helped markets recover nearly all losses following unrest in France. The STOXX 600 rose 0.92% to 644.49, led by Randstad’s 20% surge after quarterly results exceeded expectations and management expressed optimism for 2027. France’s CAC 40 gained 1%, although political uncertainty persisted. UK consumer inflation accelerated to 3.5% from 3.1% in August, while borrowing exceeded forecasts, increasing pressure ahead of next week’s budget and strengthening expectations of a Bank of England rate rise. ECB economists highlighted reduced fossil-fuel dependence, fiscal support and AI investment as sources of economic resilience. SAP achieved quarterly revenue of €10 billion, with cloud revenue rising 26% to €6.67 billion, and lifted its annual revenue outlook towards the upper end of guidance.
US Market Summary
Wall Street closed higher on Wednesday, led by the Nasdaq as results from SpaceX and Super Micro Computer strengthened appetite for AI-related stocks. SpaceX gained 7.8% after reporting its first profit as a listed company, while potential merger discussions supported Tesla. Communication services lagged, with Netflix falling 5.3% after disappointing fourth-quarter profit guidance and Alphabet declining 1.6%. Mortgage applications fell 5.3% in the week ended 16 October despite the 30-year fixed rate easing to 7.41%, highlighting subdued housing demand. Meta announced non-voting shares to support its AI expansion. Tesla reduced capital expenditure guidance and generated unexpected positive free cash flow, although net income declined. IBM raised its software growth forecast as delayed contracts began closing, supporting an after-hours share-price gain.
Asian Market Summary
Asian equities struggled in early Thursday trading as optimism over technology earnings faded amid concerns about AI investment and Gulf tensions. The Bank of Korea held its benchmark rate at 3.00%, as expected, while maintaining a hawkish stance supported by stronger growth prospects and export momentum. Further increases remain possible as policymakers assess inflation and financial stability. In Australia, ASX reported progress in addressing regulatory problems but retained its lower dividend payout ratio and higher cost guidance. Fortescue warned that operations could be affected if negotiations with China Mineral Resources Group remain unresolved at year-end, with iron ore sales lagging shipments. Meanwhile, an Australian class action against Meta’s Facebook and Instagram alleges their algorithms exposed children to harmful content and encouraged addiction.
Currency Market Summary
The South African rand closed 0.10% firmer against the dollar yesterday, taking its gain for the month to 0.23%. The dollar steadied on Thursday as investors awaited next week’s central bank meetings, with unchanged rates but hawkish guidance expected in the US, Europe and Japan. Expectations that AI investment will sustain US growth continued to support dollar positioning, although recent gains in sterling and other major currencies suggested some bullish bets had eased. The euro remained constrained by French fiscal concerns and Europe’s energy vulnerability, while intervention risks and rate expectations supported the yen. Markets anticipate the ECB holding at 2.5% and the Federal Reserve maintaining its 3.75%–4% range, with increases expected before year-end. Japan’s next increase to 1.5% is anticipated early next year.
Commodity Market Summary
Gold edged higher on Wednesday as weaker US Treasury yields supported a recovery from a near one-week low, with investors awaiting next week’s Federal Reserve meeting. Oil rose on Thursday after Houthi attacks in Saudi Arabia prompted the evacuation of some US diplomatic personnel and family members. At least 18 shipping attacks over two weeks intensified concerns over Gulf crude supplies, with tanker risks extending beyond the Strait of Hormuz. US crude inventories fell 3.06 million barrels to 412.5 million barrels, exceeding the expected 820,000-barrel draw, while distillate stocks unexpectedly increased. Washington offered loans from its emergency heating oil reserve to ease supply pressures. Separately, Russia agreed to resume US-mediated Ukraine peace talks as soon as next month, with Ukraine expressing support.
Domestic Company News
Standard Bank Group (SBK) -4.97%
Standard Bank’s earnings attributable to ordinary shareholders rose 8.5% to R38,966 million for the nine months ended 30 September 2026, with headline earnings growth matching this increase. Performance remained in line with August guidance despite heightened geopolitical risks, rising energy prices and tighter South African monetary policy. The diversified banking franchise remained resilient, although a stronger average rand dampened reported revenue and cost growth. Insurance and asset management headline earnings growth moderated from 15% in the first half, reflecting a strong comparative base rather than weaker underlying momentum. Earnings growth from the group’s 40% stake in ICBC Standard Bank also slowed in constant currency. Ordinary shareholders’ equity reached R268,115 million, with the group remaining well capitalised and liquid. The financial information has not been externally audited.
Sasol (SOL) +3.83%
Sasol reported mixed operational performance for the three months ended 30 September 2026, while remaining on track to meet guidance across its businesses. Mining achieved its highest quarterly production in six years, reducing external coal purchases and improving feedstock quality. Secunda production declined following a planned shutdown, while Natref output fell amid planned and unplanned outages. Liquid fuels sales increased, supported by inventory drawdowns and customer demand, with refining margins remaining favourable. Chemicals Africa revenue declined quarter on quarter as volumes and prices softened, although revenue exceeded the prior year. Sasol agreed to sell its Nitrates business to Enaex Africa, subject to approvals and closing conditions. FY27 and FY28 oil hedging programmes are complete, while sustainable aviation fuel production at Natref is expected in Q2 FY27.
Famous Brands (FBR) +1.04%
Famous Brands increased its interim dividend by 4.9% to 170 cents per share for the six months ended 31 August 2026, supported by a 108% rise in free cash flow to R459 million. Revenue grew 2.3% to R4,336 million, underpinned by Leading Brands demand and franchise expansion. However, Signature Brands pressure and weaker markets outside South Africa, particularly Botswana, constrained profitability. Operating profit fell 4.7% to R375 million, with the margin narrowing to 8.6%, while headline earnings per share declined 3.2% to 228 cents. Net debt decreased 20.2% to R881 million and capital expenditure fell 73% to R38 million. The group spent R57 million on share buybacks and recognised a R41 million goodwill impairment linked to reducing its Botswana Retail Group stake from 51% to 30%.
Quilter plc (QLT) +1.16%
Quilter reported third-quarter core net inflows of £2.9 billion, taking the year-to-date total to £8.9 billion, up 31% year on year and approaching the £9.1 billion achieved in 2025. Assets under Management and Administration increased 19% year on year to £160.5 billion. Platform net inflows reached £8.0 billion year to date, with quarterly inflows rising 25% to £2.6 billion. Quarterly Platform inflows from independent advisers increased 33%, while those from Quilter advisers rose 10%. High Net Worth quarterly net inflows increased 35% to £322 million, equivalent to 4% of opening assets on an annualised basis, reflecting strengthening momentum. Core business persistency remained strong at 91% year to date, while Quilter adviser productivity improved 9% year on year in the third quarter.
Global Company News
Meta Platforms (META) +0.47%
Meta shares rose more than 4% after hours as quarterly revenue reached $64.60 billion, exceeding expectations, while fourth-quarter guidance was $73 billion–$76 billion. The company plans to issue non-voting Class C shares in January 2027, effectively creating a two-for-one split, to support acquisitions and staff retention while preserving Mark Zuckerberg’s control. Its Muse AI agent attracted more than 10 million accounts within six weeks, with AI businesses expected to contribute incremental revenue from 2027. However, annual capital expenditure guidance increased to $135 billion–$145 billion, and quarterly free cash flow swung to a $2.12 billion deficit. Diluted earnings per share were $3.83, reflecting a $9.89 billion settlement charge. Separately, a New Mexico judge ordered a $25 billion penalty, adding to legal pressures.
Tesla (TSLA) +3.41%
Tesla reduced its 2026 capital expenditure forecast to roughly $20 billion from more than $25 billion, helping generate unexpected third-quarter free cash flow of $1.53 billion against an anticipated $4.92 billion outflow. Quarterly capital spending totalled $4.7 billion, below analysts’ $7.5 billion estimate, raising questions about investment in AI, robotaxis and robotics. Revenue remained flat year on year but exceeded expectations, while net income fell 43%. Automotive gross margin excluding regulatory credits reached 18.1%, above the 16.7% forecast. Deliveries totalled 486,532 vehicles, and Tesla reported its largest passenger-vehicle backlog in four years. Merger discussions with SpaceX remain under consideration through special committees. Shares reversed an initial after-hours gain to trade 2% lower as investors assessed stronger cash generation against reduced spending and weaker earnings.
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Research Team