Trading update : 1 August 2025

Samsung’s $16.5 billion AI chip deal with Tesla sparked a jump in tech stocks, with semis leading the charge. In contrast, beer brewers and Whirlpool tumbled on dismal demand. In the hunt for growth, Europe is putting its money where its mouth is – Ireland unveiled a €212 billion infrastructure plan while Germany is mounting a €100 billion corporate investment revival. As EMs regain their shine amid shifting flows, South Africa may shine with more rate cuts on the cards, and a pickup in activity in the country’s mining sector.

Deficit damage

President Trump’s tax and spending law will add $3.4 trillion to the US deficits over a decade and leave millions without health care coverage, according to the nonpartisan Congressional Budget Office (CBO).

Semis surge

The semiconductor sector gained +1.6% and emerged as the best-performing sector on the day across the S&P 500 (VOO-NASQ) after Samsung announced a $16.5 billion deal to supply AI chips to Tesla (TSLA-NASQ). The stocks jumped +7% and +3%, respectively, on the news.

Tipple tumble

After announcing beer volumes that are down -0.4%, with Europe and the US notably weak, beverage makers Heineken and Anheuser-Busch InBev (ANH-JSE) stock fell -8.5% and -3.7% respectively. Pricing disputes with EU retailers were limiting the availability of stock, while rising raw material and energy costs continue to pressure margins, and tariff uncertainty persists.

Tax-free shopping spree 

A UK retailers’ association renewed its call for UK Chancellor Rachel Reeves to bring back tax-free shopping for tourists, which it says may bring in an additional £3.65 billion from EU visitors.

Ireland’s infrastructure pot o’ gold

Ireland’s government has announced a “transformational” plan to spend €212 billion over the next decade on infrastructure, as it faces growing pressure to spend cash from record budget surpluses.

Dollar extends July rally

The US dollar climbed after Trump reached a tariff deal with the European Union, and signs mounted that the US and China will extend their trade truce. The greenback is poised for its best month in 2025 in July.

EM inflows continue

Investors poured cash into exchange-traded funds (ETFs) that buy emerging market (EM) stocks, like the iShares MSCI Emerging Markets ETF (EEM-NASQ), for a ninth straight week. Bloomberg reported that inflows to US-listed ETFs that invest across developing nations, as well as those that target specific countries, totalled $2.36 billion in the week ended July 25. Brendan McKenna, a strategist at Wells Fargo, said:

“Investors are still finding EM attractive despite rich valuations” and that “trade uncertainty is receding and the Fed is getting closer to starting an easing cycle; that dynamic should attract EM inflows”.

In a whirl of trouble

Whirlpool (WHR-NASQ) fell -14% after hours after the home appliance manufacturer reported a –5.4% YoY drop in net sales with adjusted earnings per share down a massive -43.9%, well shy of analyst expectations. Elevated rates continue to hurt the housing market, and this sector relies on people moving and kitting out new homes. Stockpiling Asian brands in the face of tariffs also hurts the brand. The company pulled back dramatically on guidance, which hurt the stock.

Turning tide

A Bloomberg report quoting Goldman Sachs’s asset management division suggests emerging markets (EM) are set for further gains as renewed appetite for diversification and light positioning bolster the case for the asset class, which has been marred by years of outflows.

“The flow tide is turning — and we believe EM is catching the first wave,” said Anupam Damani, co-head of emerging-market debt at Goldman Sachs Asset Management. “After years of being sidelined by US-centric risk taking, diversification is quietly reclaiming its place in global portfolios.”

German revival

More than 60 leading companies in Germany have unveiled an investment drive worth at least €100 billion in new projects to help lift Europe’s biggest economy out of stagnation.

UK thrift

Cautious British households are more inclined to save money than at any point since the run-up to the global financial crisis, according to a GfK survey of consumer sentiment reported on by Bloomberg. Amid mounting job losses and rising inflation in the UK, GfK said its overall consumer confidence index slipped one point to minus 19 in July, partially reversing an improvement the previous month.

More concerning was its savings index, which rose seven points to 34, the highest level since November 2007 when the credit crunch was gathering pace. GfK said households were building “contingency funds” amid fears of further tax rises in the autumn.

Confident cutting 

Goldman Sachs and Investec Bank believe there is space for the South African Reserve Bank (SARB) to use its remaining three rate-setting meetings this year to cut rates, while BNP Paribas SA sees it taking a much more gradual approach. Inflation has now been below the 4.5% midpoint of the SARB’s target range since August, which is where it prefers to anchor expectations. The central bank’s benchmark rate is currently 7.25% and the monetary policy committee will announce its next rate decision on July 31.

SSW back buying

Now that its balance sheet has improved, Sibanye-Stillwater (SSW-JSE) is back buying, with the company set to acquire Metallix, a US-based silver recycler. The company’s balance sheet will accommodate the $82 million cash transaction.

Stock focus: African Rainbow Minerals

With the PGM basket price above the guided incentive level for the Two Rivers Merensky project and over 90% of the R7.3 billion capital already spent, Investec analysts argue there is a strong case for African Rainbow Minerals (ARI-JSE) to recommission the project, which includes a platinum mine and concentrator.

The analysts assert that the economic case for recommissioning the project is compelling and that the stronger PGM outlook will prompt African Rainbow Minerals to reevaluate the project to capture the expected upswing in the cycle and unlock potential value.

The miner also has cash on hand following a successful cash preservation strategy, and a strong balance sheet to fund the project, which is expected to increase PGM output at a compound annual growth rate of 9%, compared to just 3% without it.