Visa Beats Expectations as Payments Volume Tops $4 Trillion

Market Commentary

South African Market Summary

South African equities ended lower on Tuesday, with the JSE All Share declining 0.19% to 109,904.12 and the Top 40 falling 0.27% to 101,832.16. Domestic sentiment was tempered by a 0.3% month-on-month decline in the composite leading business cycle indicator for May, signalling softer forward economic momentum. Canal+ reported a modest increase in first-half revenue as growth across its legacy operations offset a narrower contraction at MultiChoice, acquired in September 2025. The group is pursuing subscriber recovery, cost efficiencies and wider distribution across the African pay-TV business. Separately, Cape Town authorities approved Equinix’s proposed development of two data centres in King Air Industria despite concerns regarding water consumption, electricity demand and environmental impact amid rising infrastructure demand across Africa.

European Market Summary

European equities advanced for a third consecutive session on Tuesday, with the STOXX 600 rising 0.4% to 646.89 as consumer-sector earnings offset weakness elsewhere. Unilever surged 8%, its largest one-day gain in four years, after second-quarter sales growth exceeded expectations, helping lift London’s FTSE 100 by 0.8%. The STOXX 600 food and beverages index gained 2.8%, while personal and household goods rose 2.3%, placing both among the strongest sectors. Investor sentiment towards consumer-focused shares improved as the earnings season gathered momentum. In the UK, long-term inflation expectations eased, with the Citi and YouGov measure for five years or more declining to 3.7% in July from 3.9% in June, potentially reducing concerns at the Bank of England over persistent price pressures.

US Market Summary

The S&P 500 closed higher on Tuesday as gains in Boeing and Coca-Cola offset renewed weakness across semiconductor shares ahead of major technology earnings. Coca-Cola rose 5% after raising its annual revenue and profit forecasts, while Boeing advanced 4.8% after generating positive free cash flow. Microsoft gained 1.1% before its results, whereas Amazon slipped 0.2%. Attention now turns to Wednesday’s Federal Reserve decision, with markets assigning a 71% probability to unchanged rates and 29% to a 25-basis-point increase. Analysts expect second-quarter S&P 500 earnings to rise 39% year on year, largely driven by artificial-intelligence companies. Fitch nevertheless warned that elevated technology valuations, debt-funded AI investment and uncertainty surrounding the US-Iran conflict remain significant global credit risks for investors.

Asian Market Summary

Asian equities weakened on Wednesday as technology shares extended their sell-off following another poor session on Wall Street. Semiconductor stocks led declines, with SK Hynix falling more than 10% after record quarterly profit and revenue still missed analyst expectations. Samsung Electronics lost over 4%, LG Innotek declined 9% and Seoul Semiconductor dropped more than 6%. In China, the central bank injected 206.5 billion yuan through seven-day reverse repos at 1.40% and a further 600 billion yuan via an overnight operation priced at 1.25%. Rio Tinto reported its strongest half-year underlying earnings in four years, supported by copper and lithium demand linked to data centres. More than half of group profit now comes from businesses outside iron ore under its strategy.

Currency Market Summary

Currency markets were cautious ahead of the US Federal Reserve’s policy decision amid renewed tension in the Middle East. The South African rand traded unchanged on Tuesday, with a firmer dollar and weaker gold prices limiting support for the risk-sensitive currency. Sterling fell to its lowest level in more than three weeks against the dollar as declining oil prices eased UK inflation concerns, while expectations of a US rate increase strengthened the greenback. The dollar remained near a one-month high on Wednesday as hostilities encouraged defensive positioning before the Federal Reserve announcement. Meanwhile, the Australian dollar weakened after softer-than-expected inflation reduced the likelihood of further rate increases by the Reserve Bank of Australia, weighing on yield expectations and currency sentiment.

Commodity Market Summary

Gold edged lower on Wednesday as a firm US dollar limited demand and investors awaited the Federal Reserve’s policy decision for guidance on inflation and interest rates. Oil prices rose by more than $2 a barrel in early trade, recovering part of Tuesday’s decline after industry data indicated US crude inventories fell by 3.3 million barrels in the week ended 24 July. Gasoline stocks increased by 918,000 barrels, while distillate inventories rose by 355,000 barrels. Official Energy Information Administration data is due later Wednesday. Prices also found support from expectations that OPEC+ may pause production increases for three months from October. Markets remained sensitive to developments involving Iran, disrupted flows through the Strait of Hormuz and efforts to restore trade.

Domestic Company News

Kumba Iron Ore Limited (KIO) +0.73%

Kumba Iron Ore reported reviewed interim results for the six months ended 30 June 2026, highlighting resilient cash generation despite external cost pressures. The group achieved an average realised export price of US$90 per wet metric tonne, representing an 8% premium to the benchmark, while C1 unit costs reached US$46 per wet metric tonne. Kumba recorded an EBITDA margin of 35%, attributable free cash flow of R1.9 billion and a 26% return on capital employed. Closing net cash stood at R12.1 billion, supporting an interim cash dividend of R7.90 per share. Operationally, Sishen remained fatality-free for more than ten years, while Kolomela exceeded three years and began receiving wheeled renewable electricity. Women represented 32% of employees across operations.

Harmony Gold Mining Company Limited (HAR) -1.35%

Harmony Gold concluded new multi-currency syndicated facilities comprising US$500 million, A$500 million and R7 billion, reducing funding costs, extending maturities and strengthening liquidity. The facilities will partly refinance existing US dollar and rand loans, the MAC Copper acquisition bridge facility, and support general corporate purposes. Australian dollar funding aligns the capital structure with Harmony’s expanding copper portfolio, including MAC Copper and the Eva Copper Project. Citi and Nedbank coordinated the transaction, which achieved about 93% lender participation and commitments roughly three times the targeted amount. Four sustainability-linked loans incorporate renewable energy, potable-water reduction and community-development targets, with margins adjusting by up to five basis points. The refinancing leaves debt covenants unchanged and preserves financial flexibility for future disciplined strategic investment.

Boxer Retail Limited (BOX) -1.31%

Boxer Retail reported turnover growth of 7.2% for the 20 weeks ended 19 July 2026, with like-for-like sales increasing 2.2% as momentum slowed in a constrained trading environment. Internal selling price inflation was negative 1.9%, reflecting double-digit deflation across maize meal, rice and flour. Despite softer sales growth, like-for-like volumes remained positive and Boxer calculated that its market share increased during the period. Management expects the first-half trading profit margin to remain in line with the prior corresponding period, supported by other trading income and margin control. Boxer opened 19 stores, comprising six Superstores and 13 liquor outlets, and retained its full-year rollout target. Turnover growth is expected to improve later in FY27 as inflation normalises and new stores contribute.

CANAL+ SA (CNP) +9.08%

CANAL+ reported first-half revenue of €4.287 billion, up 40%, primarily reflecting the consolidation of MultiChoice, while like-for-like revenue excluding MultiChoice increased 1.4%. Adjusted EBIT before exceptional items rose 68% to €433 million, producing a 10.1% margin, while free cash flow before exceptional items reached €414 million. MultiChoice adjusted EBIT increased 160% to €143 million, supported by €120 million of synergy benefits, including the effect of discontinuing Showmax. Subscriber acquisition across MultiChoice markets rose 40%, with South Africa recording its strongest June intake in a decade. CANAL+ remains on track for €250 million of adjusted EBIT synergies and €220 million of free-cash-flow synergies, while reaffirming full-year guidance for flat revenue, €735 million adjusted EBIT and free cash flow above €250 million.

Global Company News

Visa Inc. (V) +1.12%

Visa reported adjusted profit of $6.3 billion, or $3.32 per share, for the quarter ended 30 June, exceeding the $3.23 consensus estimate. Net revenue increased 14% to $11.63 billion, ahead of expectations of $11.39 billion. Payments volume rose 10% in constant currency and surpassed $4 trillion for the first time, while processed transactions advanced 10%. Cross-border volume grew 13%, supported by international travel and World Cup-related spending, with stronger card-present activity in selected US host cities. Operating expenses increased 19% to $4.8 billion, largely because of higher personnel costs. Visa also plans to eliminate about 7% of its workforce, mainly across technology and product teams, as management prepares the business for its next growth phase amid geopolitical and economic uncertainty.

Coca-Cola Company (KO) +5.00%

Coca-Cola reported second-quarter comparable revenue of $13.37 billion, up approximately 6% and ahead of the $13.16 billion consensus estimate. Adjusted earnings per share reached $0.97, exceeding expectations by $0.05, while the comparable operating margin improved to 35.6% from 34.7%. Demand benefited from resilient sales of core beverages, zero-sugar products and World Cup-related consumption, including energy drinks promoted around hydration breaks. The group raised its 2026 organic revenue growth outlook to approximately 5% from 4% to 5%, while comparable earnings-per-share growth is now expected at 9% to 10%. Higher aluminium, PET and energy costs remain a pressure, and can shortages contributed to market-share losses in India. Management expects to provide further detail on 2027 cost expectations in October later this year.

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