SpaceX IPO priced at US$135 per share, valuing company at US$1.77tn

Market Commentary
South African Market Summary

South African equities advanced yesterday, with the JSE All Share index gaining 0.60% to 110,253.85 points and the Top 40 rising 0.65% to 102,315.02 points. The firmer market backdrop was supported by a modest improvement in business confidence, with the SACCI Business Confidence Index rising to 124.1 in May from 123.6 in April, although still below March’s 131.3 level. The Reserve Bank’s first-quarter current account data showed South Africa recorded its largest surplus in more than four years, driven by stronger net gold exports. Domestic activity data was mixed, with mining output accelerating to 8.2% year-on-year in April, while manufacturing production contracted 2.9%, highlighting uneven momentum across the real economy.

European Market Summary

European equities recovered on Thursday, with the pan-European STOXX 600 rising 0.5% to 621.53 points, snapping a four-day losing streak as investors looked beyond escalating rhetoric from US President Donald Trump and focused on the European Central Bank’s latest policy decision. The ECB raised interest rates by an expected 25 basis points, its first hike in nearly three years, as policymakers sought to contain inflation risks linked to higher oil and gas prices from the ongoing Middle East conflict. The central bank lifted its 2026 inflation forecast to 3.0% from 2.6% and its 2027 projection to 2.3% from 2.0%, while cutting its growth outlook. Markets now expect further, but cautious, policy tightening.

US Market Summary

US stocks closed sharply higher on Thursday, with the major indices posting their strongest daily percentage gains since 8 April, after President Donald Trump said he had cancelled planned strikes against Iran. Risk appetite improved further on hopes that the US and Iran could sign a peace deal as soon as this weekend, potentially reopening shipping through the Strait of Hormuz. Investor attention also turned to SpaceX’s expected Nasdaq debut on Friday, after the company priced a record US$75 billion initial public offering at US$135 per share, valuing the group at US$1.77 trillion. However, inflation concerns persisted after producer prices rose more than expected in May, while jobless claims increased marginally ahead of next week’s Federal Reserve meeting.

Asian Market Summary

Asian equities joined the global rally on Friday as hopes of a potential Middle East peace deal lifted risk appetite, while the dollar and bond yields eased and oil prices fell to two-month lows, helping to temper inflation concerns. In Japan, a Reuters poll showed core consumer inflation likely held broadly steady in May, partly reflecting the end of government fuel subsidies, but remained below the Bank of Japan’s 2% target for a fourth consecutive month. Investors also monitored Japan’s tightening foreign investment screening regime, as Finance Minister Satsuki Katayama said Tokyo is working closely with the United States to strengthen national security protections. A new cross-ministerial review committee, modelled on CFIUS, is expected to launch within weeks.

Currency Market Summary

The South African rand strengthened on Thursday as the US dollar wavered, although broader risk appetite remained constrained by renewed US-Iran strikes and elevated oil prices. Sterling held firm against the euro ahead of the European Central Bank’s policy decision, with limited UK-specific catalysts leaving the rate outlook as the key driver for the currency pair. The dollar stabilised in early Friday trade after slipping to its weakest level in a week, as markets assessed reports that a Middle East ceasefire deal could be imminent. However, stronger-than-expected US producer price inflation, driven partly by higher energy costs, reinforced expectations of further Federal Reserve tightening, while markets also priced in another likely ECB rate increase in September.

Commodity Market Summary

Gold prices weakened on Friday and were on course for a weekly loss, pressured by renewed inflation concerns and expectations that the US Federal Reserve may still need to raise interest rates later this year. Oil prices also extended losses after US President Donald Trump cancelled planned strikes against Iran, reducing fears of a further escalation in Middle East hostilities after recent tit-for-tat attacks. Trump said discussions with Iran had progressed, although Iranian media reported that Tehran had not approved the text of any agreement. Despite the softer oil price, supply risks remain elevated after Iran announced the closure of the Strait of Hormuz, a critical route for around a fifth of global oil and liquefied natural gas shipments.

Domestic Company News

Sirius Real Estate Limited (SRE) -0.37%

Sirius Real Estate has successfully placed €185.1 million of new notes through taps of two existing corporate bonds, lifting both instruments to €500.0 million benchmark size. The larger tap comprises €150.0 million added to its 4.000% bonds due January 2032, while a further €35.1 million was added to its 1.750% bonds due November 2028. Settlement is expected on 17 June 2026. Proceeds will be used for general corporate purposes and to refinance debt, supporting funding flexibility while maintaining disciplined leverage. Management said the increased benchmark size should enhance secondary market liquidity across Sirius’ public debt platform. The transaction was supported by HSBC, Barclays, BNP Paribas, ABN AMRO and Lazard, indicating continued market backing for Sirius’ operating platform and growth strategy.

Alexander Forbes Group Holdings Limited (AFH) -2.60%

Alexander Forbes reported a stronger operating performance for the year ended 31 March 2026, supported by growth in income, profit and assets under administration. Operating income increased 10% to R4.85 billion, while normalised profit from operations rose 22% to R1.03 billion, reflecting improved business momentum and operating leverage. However, headline earnings per share from total operations declined 5% to 67 cents, while normalised headline earnings per share was maintained at 69 cents. The group remains well capitalised, with a regulatory surplus of R1.19 billion and a capital cover ratio of 2.2 times, above its 1.2 times target. A final dividend of 33 cents was maintained, lifting the annual dividend 4% to 57 cents per share.

Novus Holdings Limited (NVS) +4.59%

Novus Holdings expects earnings for the year ended 31 March 2026 to decline, with earnings per share forecast at between 78.58 cents and 89.66 cents, representing a decrease of 19.1% to 29.1% from 110.88 cents in the prior year. Headline earnings per share are expected to be more resilient, at between 81.26 cents and 88.32 cents, reflecting a decline of 0% to 8% from 88.33 cents previously. The weaker EPS performance largely reflects the absence of prior-year once-off gains, including a R16.3 million bargain purchase gain and a R51.1 million associate investment gain. Current-year earnings were also affected by a R19.9 million impairment of a related-party loan receivable.

Global Company

Adobe Inc. (ADBE) -6.25%

Adobe shares fell 5% in extended trading after the company announced the departure of CFO Dan Durn, adding to investor uncertainty following long-time CEO Shantanu Narayen’s decision to step down three months ago. Steve Day, senior vice president of corporate finance, will serve as interim CFO from 15 June. Despite the leadership changes, Adobe raised its fiscal 2026 outlook, now expecting revenue of US$26.5 billion to US$26.6 billion and adjusted earnings per share of US$24.35 to US$24.45. Second-quarter revenue also exceeded expectations, supported by growing demand for AI tools. AI-first annual recurring revenue tripled to more than US$500 million, although competition from Figma, Canva and AI-native design platforms remains a key concern.

Space Exploration Technologies Corporation (SPCX)

SpaceX priced its record US initial public offering at US$135 per share, raising US$75 billion through the sale of 555.56 million shares and valuing Elon Musk’s rocket, satellite and AI business at US$1.77 trillion. The listing surpasses Saudi Aramco’s 2019 IPO as the largest on record by proceeds and positions SpaceX among the most valuable US-listed companies when trading begins on Nasdaq. The valuation places it above JPMorgan, Berkshire Hathaway, Eli Lilly, Meta Platforms and Tesla, despite questions over profitability and revenue scale. Musk structured the deal unusually, reserving 30% of shares for retail investors and retaining 82% voting control. The IPO is expected to anchor a sharp rebound in US listings.

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