Trading update : 6 June 2025

Investor FOMO

Global equities continued to edge closer to an all-time high, with some analysts seeing a potential for more upside underpinned by dip-buying. “Many investors may have felt left out and are looking for potential corrections to deploy the cash,” said Massimiliano Bondurri, founder of SGMC Capital, in an interview on Bloomberg TV.

S&P 500 bounces

Wall Street rallied after a slew of strong tech earnings and an unexpected increase in US job openings buoyed investor optimism. Tech giants led the S&P 500’s (VOO-NASQ) bounce, with Nvidia Corp. (NVDA-NASQ) rising almost 3%. Energy shares joined a rally in oil. The dollar rose and bonds fell, while jobs data reinforced the Fed’s assertion that the US labour market is in a good place. 

Quietly confident

US consumer confidence and JOLTS job openings are on the up and up, which is supporting sentiment in the world’s biggest market. Bargain retailer Dollar General (DG-NASQ) surged +15.85% after smashing Wall Street expectations, offering a largely constructive view on the US consumer while stressing strong demand for value. Dollar General also raised its full-year guidance despite tariff concerns.

Dollar’s loss, EM’s gain

Despite positive returns from emerging market assets this year, David Hauner, head of global emerging markets fixed-income strategy at Bank of America, said investor positioning in the asset class remains light. However, Bloomberg reports that this could change in the coming months, with emerging market assets expected to deliver “several per cent” returns this year due to a continued decline in the US dollar.

Lost in Cyberspace

Apple’s (AAPL-NASQ) rollout of AI services in China with Alibaba is being held up by a Beijing regulator, the Financial Times reports. Applications are stalled at the Cyberspace Administration of China, citing increasing geopolitical uncertainties between China and the US.

June blues

Wall Street kicked off June on the back foot, with stocks sliding after a weak manufacturing report, which showed  US factory activity contracted in May. A gauge of imports also sank to a 16-year low as firms pulled back in the face of higher tariffs,  renewed trade tensions and geopolitical uncertainties. Coming off the best May for the S&P 500 (VOO-NASQ) in 35 years, the gauge retreated at the start of what’s historically one of its quietest months for gains. The dollar headed toward its lowest since 2023.

SA GDP dodges bullet

 South Africa’s economic growth beat expectations in the first quarter, with a 0.1% increase in gross domestic product (GDP), driven by the agriculture, transport, and finance sectors, which increased by 15.8%, 2.4%, and 0.2% respectively. The economy grew by 0.8% on a year-over-year basis in the first quarter, slightly ahead of forecasts for a 0.7% increase. Despite the best, the data was still poor, narrowly avoiding an overall contraction. However, six sectors reported a contraction with mining & quarrying (-4.1% QoQ) the worst of the lot. The country desperately needs the government’s reform agenda to pick up pace to support higher growth.

New car sales soar

New vehicle sales in South Africa had another solid month in May, increasing 22% overall, with passenger car sales up 30%. The import brand numbers were simply staggering, with the big 3 Motus Holdings (MTH-JSE) brands up 39%. Hyundai performed best, with sales surging +49% and is now 7% positive for the year.  Suzuki grew by+35%.

On a quest to divest

AngloGold Ashanti (ANG-JSE) continues to deliver on its quest to divest from higher-cost assets at what could potentially be the top of the gold cycle. The latest sale will see the Mineração Serra Grande Mine – the company’s highest-cost producer with the smallest production output – go for $76 million. While the deal and deferred payments equal to 3% of net smelter returns will not really move the needle, it’s a function of focused capital allocation and avoiding closure costs if prices pull back significantly. 

South32, Anglo sell smelter

South32 (S32-JSE) and Anglo American (ANG-JSE) have completed the sale of the Samancor Metalloys manganese alloy smelter in South Africa. The facility was put on care and maintenance in March 2020 and was bought by Menar Capital Ltd. and Ntiso Investment Holdings Ltd. last year. South32 had a 60% stake in Samancor with the remainder held by Anglo.

Stock focus: Altron

Financial results from Altron (AEL-JSE) were superb, with the company’s Netstar and Fintech divisions performing well. Turnover rose 10% at Netstar and 17% at the Fintech unit, but fell by 6% overall at the other units. Earnings before tax increased by 27% and cash generation was again excellent, with R265 million in cash on the balance sheet.

The company’s performance would have done considerably better if the Australian unit had not made a loss, which is potentially a one-time event.