Stellantis Q2 shipments rise 10%, signalling early progress in turnaround strategy

Market Commentary

South African Market Summary

South African equities ended lower, with the JSE All Share declining 0.32% to 110,003.37 points and the Top 40 losing 0.39% to 101,575.27. Policy developments centred on a proposal to establish strategic petroleum reserves covering 60 days of national demand, equivalent to approximately 36 million barrels. The initiative could strengthen energy security amid heightened geopolitical and supply risks, although funding requirements and implementation costs remain material considerations. Separately, Chinese electric-vehicle manufacturer BYD is evaluating local battery and component production, signalling potential investment in South Africa’s automotive value chain. The proposed facility could support industrialisation, localisation and employment while complementing BYD’s financing partnership with Absa. Together, these developments highlight increasing policy focus on energy resilience, manufacturing capacity and foreign investment.

European Market Summary

European equities were subdued on Monday as renewed Middle East tensions, higher oil prices and shifting interest-rate expectations kept investors cautious ahead of the earnings season. The STOXX 600 was flat at 641.01 after recording its steepest weekly decline since April. Markets are increasingly pricing the inflationary implications of elevated energy costs, with expectations building that the European Central Bank could raise rates by at least 25 basis points this year. Corporate activity provided selective support: Watches of Switzerland advanced following reports of potential takeover interest, while Vodafone extended gains after Xavier Niel signalled plans to acquire a substantial stake from E& Group. Morrisons also attracted attention amid discussions over a possible £600 million property transaction with several interested parties.

US Market Summary

United States equities declined on Monday as renewed hostilities with Iran and the reinstatement of a blockade on Iranian ports lifted oil prices and weakened risk appetite. Technology stocks led the retreat, with the Nasdaq underperforming and semiconductor shares suffering losses. SanDisk, Marvell Technology and Intel fell heavily, while SK Hynix’s US-listed shares reversed part of their post-listing surge. Energy stocks provided some support to the Dow as crude prices advanced on concerns over restricted traffic through the Strait of Hormuz. Investors are also preparing for Federal Reserve Chair Kevin Warsh’s congressional testimony and inflation releases, including CPI and PPI data. June retail sales will offer a gauge of consumer resilience amid higher fuel costs and persistent price pressures.

Asian Market Summary

Asian markets traded unevenly as renewed United States–Iran tensions lifted oil prices and weakened risk appetite. China provided a counterweight, with June exports surging 27% year on year and imports rising 36%, both well above expectations, while the trade surplus reached US$125.6 billion. Strong demand for artificial intelligence hardware and tariff-related front-loading supported shipments to the United States, Southeast Asia and Europe. In South Korea, investors are preparing for the Bank of Korea’s first rate increase in more than three years after inflation accelerated to 3.2%, reinforcing expectations of a tightening cycle. Australian business conditions remained subdued but stable, while confidence improved. Regional markets therefore face competing signals from resilient trade, tighter monetary policy, escalating geopolitical risks and volatility.

Commodity Market Summary

Gold recovered from a two-week low on Tuesday as investors awaited United States inflation data and assessed escalating tensions between Washington and Tehran. Oil prices advanced 2% to four-week highs after the United States reinstated its naval blockade of Iran and attacks intensified around the Strait of Hormuz, increasing uncertainty over regional energy flows. The latest escalation followed missile strikes on two United Arab Emirates tankers, raising concerns about shipping security through a critical global oil transit route. Higher crude prices may reinforce inflationary pressures and strengthen expectations for further Federal Reserve tightening, potentially limiting gold’s upside despite its defensive appeal. Meanwhile, preliminary estimates pointed to lower United States crude inventories, although gasoline and distillate stockpiles were expected to increase.

Currency Market Summary

The South African rand weakened against the dollar as escalating Middle East tensions reduced risk appetite and pressured emerging-market currencies. The dollar index held near 101.23 ahead of United States inflation releases, with June consumer and producer price data expected to shape expectations for Federal Reserve policy. Investors will assess Chair Kevin Warsh’s first semiannual congressional testimony for guidance on inflation risks and the interest-rate outlook. Higher oil prices added to concerns for energy-importing economies, including South Africa, while supporting demand for the greenback. The Japanese yen remained close to four-decade lows despite brief gains following comments that Tokyo could reconsider state pension fund allocations. Intervention risk remains elevated, but persistent yield differentials continue to constrain a sustained yen recovery.

Domestic Company News

Northam Platinum Holdings Limited (NPH) +1.40%

Northam Platinum delivered record production and sales for the year ended 30 June 2026, with own-operation output rising 4.4% to 938,754 ounces 4E and total metal sold increasing 8.0% to 1.09 million ounces. Booysendal exceeded steady-state production, while Eland’s ramp-up drove a 25.9% increase in 4E output and a 49.5% rise in chrome concentrate production. Group chrome concentrate output advanced 17.4% to a record 1.69 million tonnes. Zondereinde recorded modest growth ahead of benefits expected from the newly commissioned 3 shaft. Management anticipates further improvements in mining volumes, grades and operational flexibility as growth projects mature. The update reinforces Northam’s expanding market share, although three workplace fatalities underscore continuing safety risks. Stronger throughput should support unit-cost efficiencies and cash generation.

Schroder European Real Estate Investment Trust PLC (SCD) +2.36%

Schroder European Real Estate Investment Trust reported a 3.9% quarterly decline in its independently valued property portfolio to €185.1 million at 30 June 2026, reflecting weaker investment demand, macroeconomic uncertainty and outward yield pressure. Secondary offices were the principal drag, led by an 11.0% fall in the St Cloud valuation after higher exit-yield and discount-rate assumptions. Hamburg and Stuttgart also recorded declines, while industrial assets in Rumilly and Rennes were marked lower due to increased capital expenditure and softer market conditions. The Apeldoorn data centre valuation decreased as its remaining lease term shortened. The update follows the board’s proposal for a managed wind-down over two to three years, allowing targeted asset management and orderly disposals aimed at maximising shareholder value.

Purple Group (PPE) -1.72%

Purple Group has agreed to acquire 100% of Telescope AI for consideration of up to US$10.75 million, combining US$5 million in cash, US$2 million in newly issued shares and up to US$3.75 million in deferred payments. Telescope AI provides AI-driven investment discovery, research, technical analysis and compliance infrastructure to more than three million users across seven jurisdictions. The acquisition will integrate Telescope AI’s full product suite across EasyEquities and Purple Group’s broader platform, which serves 1.3 million active clients and holds R100 billion in assets. Strategically, the transaction should deepen client engagement, enhance product personalisation and create a new global enterprise revenue stream. Execution risks include integration, ongoing cash requirements, regulatory approvals and potential shareholder dilution from equity-based settlement mechanisms.

Global Company News

Stellantis NV (STLAM) +1.99%

Stellantis reported a 10% year-on-year increase in preliminary second-quarter shipments to nearly 1.6 million vehicles, supported by a strong recovery in North America and firmer European demand. Enlarged Europe shipments rose 5% to 762,000 units, including 33,000 Leapmotor vehicles, with budget models such as the Citroën C3, Opel Frontera and Fiat Panda performing well. These gains were partly offset by weaker volumes in the Middle East, Africa and South America. The improvement provides early support for chief executive Antonio Filosa’s €60 billion turnaround strategy, centred on product launches, portfolio restructuring and new partnerships. However, shares remain near record lows, reflecting concerns about pricing, product quality, electrification strategy and Chinese competition. Investors will focus on margins, cash generation and guidance when results are released.

SK Hynix's Seoul (000660) -15.37%

SK Hynix shares fell more than 15% in Seoul, their steepest one-day decline in nearly two decades, as investors unwound gains following last week’s Nasdaq debut. Its US-listed ADRs also retreated after initially surging above the US$149 offer price. The sell-off spread across global semiconductor stocks and contributed to a 9% drop in South Korea’s Kospi, triggering a temporary trading halt. Investor concerns centre on elevated valuations, leveraged positioning and the risk that large-scale fabrication investment could ultimately create oversupply. Management, however, expects an acute memory shortage in 2027 and sustained demand beyond the decade. SK Hynix remains the leading high-bandwidth memory supplier, with a 58% first-quarter revenue share, supporting its strategic exposure to AI infrastructure spending despite near-term volatility.

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