In this edition of Lens on Markets, we look at how, Samsung Electronics is expected to deliver another record quarterly profit
Market Commentary
South African Market Summary
South African equities closed firmer on Friday, with the JSE All Share index rising 0.96% to 111,507.32 points and the Top 40 gaining 1.00% to 103,108.64 points, supported by improved risk appetite and signs of stabilisation in domestic activity. The S&P Global South Africa PMI returned to marginal expansion, rising to 50.5 in June from 49.6 in May, as easing price pressures helped offset continued weakness in output and new orders. Export demand provided some support, with new foreign orders improving slightly after May’s decline, while services was the only monitored sector to record growth in new work. Employment remained positive, although job creation eased modestly, pointing to cautious but resilient business sentiment.
European Market Summary
European equities ended the week on a strong footing, with the STOXX 600 reaching an intraday record high of 652.35 on Friday and posting its biggest weekly gain since mid-May. The index closed 0.7% higher, supported by cyclical stocks and reduced expectations of an imminent U.S. rate hike after weaker American labour-market data. Germany’s DAX also reached a record high, helped by a 2.6% gain in Siemens after a broker upgrade. Fiscal policy remained in focus after reports that Germany’s 2027 draft budget foresees borrowing above €203 billion. Defence stocks also advanced as renewed Russian strikes on Ukraine reinforced expectations of sustained European defense spending.
US Market Summary
U.S. markets were closed on Friday for the Independence Day holiday.
Asian Market Summary
Asian markets started the week mostly firmer, supported by gains in Wall Street futures and expectations for a constructive U.S. earnings season. Technology sentiment was reinforced by Foxconn, the world’s largest contract electronics manufacturer, which reported a 39.8% year-on-year increase in second-quarter revenue, ahead of forecasts, as AI-related demand continued to drive growth in cloud and networking products. However, the company flagged volatile global political conditions, a reminder that supply-chain and geopolitical risks remain elevated. In Australia, job advertisements slipped 0.2% in June, suggesting labour demand is easing only gradually despite higher borrowing costs. Regionally, Australia and Fiji signed a landmark defence alliance, strengthening security ties across the Pacific at a strategically sensitive time.
Currency Market Summary
The South African rand strengthened on Friday as a softer U.S. dollar and weaker American labour-market data reduced expectations of a near-term Federal Reserve rate hike. The dollar remained near a two-week low on Monday after recording its sharpest weekly decline since April, following June payroll data that showed slower job creation and downward revisions to prior months. The softer employment backdrop prompted markets to scale back rate-hike expectations, shifting attention to Wednesday’s minutes from the Fed’s 16–17 June meeting for further policy guidance. In Asia, the yen remained close to a 40-year low, leaving traders alert to possible Japanese intervention, although any action is expected to drive volatility rather than a sustained reversal.
Commodity Market Summary
Gold held near a two-week high on Monday after softer U.S. labour-market data reduced expectations of further Federal Reserve rate hikes, supporting demand for non-yielding assets. Oil prices edged lower as investors weighed additional supply risks after OPEC+ agreed to lift output targets by 188,000 barrels per day from August, adding to similar increases for June and July. However, the practical impact remains uncertain, with Gulf production and exports still recovering after Iran-war disruptions around the Strait of Hormuz. OPEC output rebounded by 3.3 million barrels per day in June to 19.43 million barrels per day, while Gulf exports exceeded 10 million barrels per day, although still materially below pre-war levels.
Domestic Company News
Capitec Bank Holdings Limited (CPI) +0.45%
Capitec reported exceptionally strong regulatory capital, liquidity and leverage metrics for the quarter ended 31 May 2026, reinforcing the group’s balance-sheet strength at the start of its 2027 financial year. Group CET1 capital increased to R51.5 billion, lifting the CET1 ratio to 34.9% from 32.5% at 28 February 2026, while total qualifying regulatory capital rose to R52.7 billion, equal to 35.7% versus a required 13.0%. Liquidity remained highly conservative, with the group LCR at 2,407% and NSFR at 224.7%, both well above the 100% regulatory requirement. The leverage ratio also improved to 21.0%, highlighting substantial capital headroom, resilient funding and prudent risk management across the banking franchise.
Lesaka Technologies Inc. (LSK) +6.33%
Lesaka Technologies has finalised the notice for its special shareholder meeting scheduled for 3 August 2026, following its initial announcement on 23 June. While the update is administrative in nature, the meeting remains relevant for investors given Lesaka’s strategic position in Southern Africa’s fast-growing fintech ecosystem. The group provides financial services, software and business solutions to underserved consumers and merchants, including transactional accounts, lending, insurance, merchant acquiring, cash management and alternative digital products. Its integrated platform supports payment flows between consumers, merchants and enterprises, positioning Lesaka as a digitisation enabler in cash-heavy markets. With a primary Nasdaq listing and secondary JSE listing, the shareholder process may provide further visibility on governance and strategic priorities.
Global Comapnay News
Samsung Electronics Company Limited (005930) +8.22%
Samsung Electronics is expected to deliver another record quarterly profit, with second-quarter operating profit forecast to surge to around 86 trillion won from 4.7 trillion won a year earlier, supported by a severe memory supply squeeze and AI-led demand. The strength extends beyond high-bandwidth memory into conventional DRAM and NAND, as agentic AI workloads increase server memory and storage requirements. Pricing momentum remains powerful, with Citi estimating DRAM and NAND average selling prices rose 44% and 53% quarter on quarter, respectively. However, investors will watch potential bonus provisions for semiconductor employees, which could affect reported earnings. The key medium-term risk is whether cloud providers can sustain rising AI infrastructure capex without a revenue pay-off.
Hon Hai Precision Industry Company Limited (2317) +0.63%
Foxconn delivered a strong second-quarter revenue performance, highlighting the scale of AI-related demand across global electronics supply chains. Revenue rose 39.8% year on year to T$2.513 trillion, ahead of the LSEG SmartEstimate of T$2.372 trillion, supported by robust growth in cloud and networking products as AI server demand remained strong. The group, Nvidia’s largest server manufacturer and Apple’s main iPhone assembler, also reported significant growth in smart consumer electronics. June revenue increased 52.1% year on year to T$821.8 billion, a record for the month. Management expects both sequential and annual growth in the third quarter, with AI racks retaining momentum, although investors should monitor geopolitical and macroeconomic volatility.
easyJet plc (EZJ) +0.04%
easyJet has agreed in principle to a sweetened takeover proposal from U.S. investment firm Castlelake, valuing the airline at up to £5.5 billion and potentially reshaping Europe’s low-cost aviation market. The offer of £6.90 per share represents a 73% premium to the 29 May closing price, when Castlelake first disclosed its interest. The board said it would be minded to recommend the bid, although Castlelake must submit a firm intention to make an offer by 3 August. EasyJet’s valuable landing slots at London Gatwick, Paris and Geneva remain strategically attractive, while its holidays business and Airbus fleet provide operational upside. However, ownership rules, fuel costs and geopolitical volatility remain important deal risks.
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Research Team