Woolworths shares dropped 8.5% after an unexpectedly weak trading update

Market Commentary

South African Market Summary

South African equities declined on Wednesday, with the JSE All Share falling 1.08% to 113,449.53 and the Top 40 losing 1.11% to 105,558.44. Woolworths shares dropped 8.52% after reporting sales growth of just 0.2% over 19 weeks. Food sales increased 1.9%, while Country Road Group declined 9.5%, as fuel costs, inflation and interest rates constrained discretionary spending. Aspen secured regulatory approval for generic injectable semaglutide in Brazil and South Africa, supporting planned commercial launches in those markets and Canada in the coming months. Meanwhile, Chery South Africa recalled almost 24,000 vehicles over potential rear-axle, welding and brake defects. The National Consumer Commission launched an investigation into the manufacturer, with affected vehicles manufactured or made available for sale during the past three years.

European Market Summary

European equities reached a record closing high on Wednesday as upbeat forecasts from Siemens Energy and CoreWeave strengthened confidence in AI investment and supported technology shares. The STOXX 600 rose 0.72% to 663.05, just below its intraday record of 663.41. Germany’s Council of Economic Experts raised its 2026 growth forecast to 1.3% and projected 1% growth in 2027, while warning about fiscal pressures from defence and retirement spending. In Britain, Bank of England policymaker Megan Greene supported proactive tightening to counter persistent wage-related inflation risks. Siemens Energy reported annual net income of €4.129 billion, proposed a €2.30 dividend and announced additional buybacks of up to €9 billion through fiscal 2030. E.ON maintained annual guidance after reporting broadly unchanged nine-month adjusted EBITDA of €7.1 billion.

US Market Summary

US equities advanced on Wednesday, with the S&P 500 and Nasdaq gaining more than 1% as CoreWeave’s earnings eased concerns about AI investment. CoreWeave shares surged 24.7%, their strongest daily gain in more than three months, after management forecast adjusted profitability in the first half of 2028. Nvidia stabilised during regular trading following two sharp declines, although its board was meeting to consider chief executive Jensen Huang’s future amid reports concerning his personal relationships. A potential departure would create succession uncertainty at the approximately US$4 trillion chipmaker. Treasury cash markets were closed for Veterans Day. Meanwhile, mortgage applications increased 6.2% in the week ended 6 November as the average conforming 30-year mortgage rate declined to 7.21% from 7.30%, supporting housing finance demand.

Asian Market Summary

Asian equities opened unevenly on Thursday as Nvidia’s after-hours decline unsettled sentiment following reports its board may remove chief executive Jensen Huang. Japan’s annual wholesale inflation accelerated in October, with fuel and semiconductor prices reflecting the Middle East conflict and AI-related demand. The figures reinforced expectations of a Bank of Japan rate increase from 1.25% to 1.5% at its December meeting. Separately, a Reuters survey found one-third of Japanese companies had experienced cyberattacks affecting their systems or external providers this year, prompting increased cybersecurity spending. In corporate developments, Alphabet set initial guidance for inaugural Hong Kong and Singapore dollar bond issues expected to raise at least US$2.2 billion. Singapore Airlines’ previously released half-year profit fell to S$134 million but exceeded expectations as record revenue cushioned fuel costs.

Commodity Market Summary

Oil prices fell more than US$1 on Thursday as hopes for progress towards peace in the Middle East and Ukraine weighed on supply-risk premiums. Russian and Ukrainian negotiators agreed to a major prisoner exchange, although territorial differences remained unresolved. US officials downplayed the need for additional strikes against Iran, while Tehran rejected transferring enriched nuclear material abroad and warned of consequences from renewed attacks. Supply developments added pressure, with OPEC+ output rising sharply in October, led by Saudi Arabia, despite continued disruption to shipments through the Strait of Hormuz. American Petroleum Institute figures indicated a nine-million-barrel increase in US crude inventories, ahead of Thursday’s delayed official release. Gold also traded lower this morning after declining 1.1% on Wednesday and 2.6% on Tuesday.

Currency Market Summary

The dollar strengthened as persistent US inflation and hawkish Federal Reserve commentary reinforced expectations of further monetary tightening. The dollar index rose 0.15% to 103.02 on Thursday, its highest level since April 2025, while the yen approached 160 per dollar following a dovish speech from a Japanese central banker. Traders increased bets on a December Fed rate hike after October inflation exceeded expectations, with officials leaving open the possibility of a larger 50-basis-point increase. Sterling weakened against the dollar on Wednesday, although the South African rand remained steady in early trading despite broader dollar strength. Attention now turns to New York Fed President John Williams’ panel appearance late Thursday for indications of whether his previously patient stance on further rate increases has shifted.

Domestic Company News 

Woolworths (WHL) -8.52%

Woolworths reported turnover and concession sales growth of 0.2% for the 19 weeks ended 8 November 2026, reflecting constrained consumer spending in South Africa and Australia. South African sales rose 1.6%, with Food growing 1.9%, although comparable-store growth was just 0.1%. Food online sales increased 24.1%, contributing 9.1% of divisional sales. Fashion Beauty Home sales declined 0.3%, despite growth in Homeware and Beauty. Country Road Group sales fell 9.5%, with all brands under pressure, although reduced markdowns supported margins. Financial Services’ annualised impairment rate increased to 7.3% from 6.7%. The in2food acquisition was completed on 5 November to support Food margins. Woolworths is assessing its concession trading relationship with David Jones following its placement into administration and receivership. A further update is due in January 2027.

Dipula Properties (DIB) +2.78%

Dipula Properties reported revenue of R1.671 billion for the year ended 31 August 2026, up 10.4% from R1.513 billion in 2025. Distributable earnings per ordinary share increased 8.6% to 62.17394 cents, while the dividend rose by the same percentage to 55.95655 cents, maintaining a payout of 90% of distributable earnings. Basic earnings per share advanced 19.2% to 122.05 cents, and headline earnings per share increased 20.3% to 63.86 cents. Net asset value per share rose 6.0% to R7.95 from R7.50. Attributable comprehensive income increased 32.9% to R1.239 billion from R932 million. The audited results showed growth across the disclosed earnings, distribution and asset-value measures, with headline earnings growth exceeding distributable earnings growth. The supplied extract did not include operational details or specific forward guidance.

Stefanutti Stocks Holdings (SSK) +10.48%

Stefanutti Stocks expects a substantial increase in earnings from continuing operations for the six months ended 31 August 2026. Earnings per share are forecast at 97.00–106.24 cents, up 110%–130% from 46.19 cents in the comparative period. Headline earnings per share are expected to rise 120%–140% to 97.88–106.78 cents, compared with 44.49 cents previously. The current reporting period comprises continuing operations only, while the comparative period also included discontinued operations. Comparative earnings and headline earnings per share for total operations were 28.96 cents and 34.54 cents, respectively. Weighted average shares in issue increased marginally to 167,273,097 from 167,243,684. The financial information underpinning the trading statement has not been reviewed or reported on by the group’s auditors. Interim results are expected on 24 November 2026.

Brait P.L.C. (BAT) -2.60%

Brait reported net asset value per share of R2.64 at 30 September 2026, unchanged from March and up 2% year on year after adjusting for its rights offer. Earnings and headline earnings per share fell to 4 cents from 21 cents. The R2.5 billion rights offer supported convertible bond repayment and participation in Virgin Active’s capital raise, with bond redemption delivering R270 million in coupon savings. Virgin Active’s LTM EBITDA rose 10% to £116.7 million, while Premier’s headline earnings per share increased 27% following RFG’s integration. New Look’s maintainable EBITDA grew 32% to £39.5 million. Virgin Active agreed to acquire Holmes Place Germany for €135 million. Brait’s available liquidity stood at R1.1 billion following its R2.4 billion contribution to Virgin Active’s October capital raise.

Global Company News

Alphabet (GOOGL) +2.11%

Alphabet set initial price guidance for its inaugural Hong Kong and Singapore dollar bond sales, with the transactions expected to raise at least US$2.2 billion, according to sources cited by Reuters. Guidance for the Hong Kong dollar notes was 4.60% for 2028 maturities, 5.00% for 2031 and 5.50% for 2036. Singapore dollar guidance ranged from 2.75% for 2028 notes to 4.00% for 2056 maturities, with 2031 and 2036 notes indicated at 3.25% and 3.65%, respectively. Minimum issuance sizes under consideration were HK$8 billion and S$1.5 billion. HSBC and JPMorgan are joint global coordinators for both transactions. The bonds are expected to carry Aa2 and AA+ ratings from Moody’s and S&P, respectively, with settlement scheduled for 19 November. These rates represent initial guidance rather than final pricing.

Corteva (CTVA) -0.25%
Corteva reported a 1% decline in net sales for the nine months ended 30 September 2026, with organic sales down 4% as pricing pressure offset stable volumes. Weakness was concentrated in Brazil and US acetochlor, while regions outside Latin America recorded volume growth. Pro forma income from continuing operations was $112 million, equivalent to $0.16 per share. Adjusted pro forma operating EBITDA reached $943 million, with the margin expanding 30 basis points to 17.6%. Operating EPS was $0.76. Weaker-than-anticipated Brazilian conditions prompted updated full-year guidance, with adjusted pro forma operating EBITDA expected at $1.10–$1.125 billion and operating EPS at $0.76–$0.80. Management highlighted strong new-product performance and productivity improvements, while the board authorised the first common dividend following the spin-off.

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