🇿🇦 Mzansi Market Memo — Friday, 1 August 2025

Molweni gents and gentleladies.

Our brief flirt with 100,000 seems to be a thing of the past. The All Share took a few hits this week. The ZAR empathised with a rough day following the interest rate cut (a natural occurrence as capital exits the economy). Today we dive into the decision as our Friday exec pick.

Let’s get to the money.

⚡ Before the Bell

• 🌍 Global & Local Market Recap

  • JSE All Share Index: down 0.80% to 98,520

  • USD/ZAR Exchange Rate: R18.15 major drop on interest rate cut

• Stats SA today: quiet

• Earnings today: 

  • AGMs: Stefanutti Stocks

  • Results: AB InBev (Interim)

📣 SENS Roundup

1. Anglo American Platinum (AMS): Profit dips despite operational recovery
   Amplats reported a 62% drop in basic earnings for the six months ended June 2025, citing lower metal prices and inflationary pressure. Headline earnings per share fell to R23.37, down from R61.73. Management maintained production guidance for FY2025 but flagged ongoing cost challenges.

2. Thungela Resources: Share repurchase programme launched
   Thungela announced a R1.05 billion share repurchase programme for up to 10% of its issued share capital. The move aims to enhance shareholder returns and optimise capital allocation amid strong cash generation.

3. Pan African Resources: Gold production update
   The company reported a 2.7% increase in annual gold production to 182,458 ounces for FY2025. Pan African reaffirmed its FY2026 guidance and noted solid performance from Barberton and Evander operations.

4. Alphamin Resources: Q2 earnings and production jump
   Alphamin posted strong results for Q2 2025, with tin production up 13% and EBITDA increasing 20% quarter-on-quarter. The company benefited from stable operations at Mpama North and expects further gains from its new Mpama South project.

5. Vukile Property Fund: Green bond listing
   Vukile listed a R600 million green bond under its DMTN programme. Proceeds will be used to fund eligible green buildings and sustainability upgrades across its property portfolio.

StatsSA roundup

Producer Price Index (PPI) – June 2025

• Headline PPI (Final Manufactured Goods):
  Annual inflation rose slightly to 0.6% (up from 0.1% in May). Monthly growth was 0.2%. Key driver: Food, beverages & tobacco (+4.0% y/y, contributing +1.2 percentage points).

• Intermediate Manufactured Goods:
  Slowed to +5.5% y/y from 6.9%, with a 0.7% monthly decline. Main drag: Chemicals, rubber & plastics (-2.9% m/m).

• Electricity & Water:
  Surged 31.2% m/m, annual rate steady at 10.7%. Electricity alone jumped 35.9% m/m, driving the spike.

• Mining PPI:
  Rose to +4.8% y/y (from 2.8%), up 1.7% m/m.Boosted by gold, non-ferrous metals, and quarrying.

• Agriculture, Forestry & Fishing:
  Slowed slightly to +5.0% y/y (from 6.0%), up 0.3% m/m. Animal products (+13.8% y/y) led the increase.

• Read more: StatsSA

Construction Material Price Indices – June 2025

• Overall Construction Input Prices:

  • Annual: -1.6% y/y, showing moderate deflation.

  • Monthly: -0.8% m/m.

• Key monthly movers:

  • ↑ Construction tyres (+5.1%),

  • ↑ Electrical components (+2.2%),

  • ↓ Ready-mix concrete (-2.1%),

  • ↓ Structural & reinforcing steel (-1.6%).

• Civil Engineering Inputs:

  • Modest annual growth: +0.4% y/y.

  • Monthly: -0.5% m/m, led by declines in bitumen-linked inputs.

• Plant & Equipment Prices:

  • Strong annual growth: +9.4% y/y, flat m/m.

• Read more: StatsSA

🧠 Exec Pick - a Friday deep dive

To cap off the week, we’re doing a deeper dive as an exec pick. Still shorter than the upcoming Sunday Special Edition, but with a bit more meat than your daily exec picks format. Don’t worry there’s still a TLDR at the end.

🧠 Exec Pick – Rates on the Radar: SARB’s 2025 Journey and What’s Next

South Africa’s monetary policy landscape has been anything but easy this year. With inflation cooling, growth stagnating, and political uncertainty intensifying, the South African Reserve Bank (SARB) has found itself juggling conflicting priorities — and the pressure isn’t easing.

The Year So Far:
In a surprise move earlier this year, the SARB cut interest rates to 2022 levels, breaking a long streak of policy tightening. The Monetary Policy Committee cited disinflationary trends and growing concern over GDP stagnation as primary reasons for the pivot. The latest guidance suggests the MPC is now unofficially targeting 3% inflation — the lower end of its 3–6% mandate — a sharp stance that adds clarity but may come at a cost.

Why now?
Domestic inflation has fallen meaningfully in recent months, supported by lower food and fuel prices. However, the real economy is barely moving. GDP growth is expected to hover around 1% for 2025, and PMI data shows output stagnating. In this context, the SARB saw room to loosen policy without losing credibility.

The Rand Complication
Just as the MPC turned dovish, global sentiment started turning hawkish again. Uncertainty around US trade policy and a potential Trump presidency has already weakened the rand, pushing USD/ZAR back toward R18. Analysts warn that any trade fallout — including the loss of AGOA benefits — would create new inflationary pressures, limiting the SARB’s policy wiggle room.

What the Data Says
According to S&P Global’s July report, PMI indicators are now being used to predict SARB decisions with high accuracy. Key findings:

• The PMI Output Prices Index shows a 65% correlation with interest rate decisions.

• A reading of 60 implies a 77% chance of a rate hike; a reading of 48 implies a 63% chance of a cut.

• The SARB appears more sensitive to price data than to output — meaning inflation is still in the driver's seat, even when growth is anaemic.

Outlook:
The market is now split between two camps:

• Doves who see room for further cuts due to low demand, soft inflation, and weak PMI output.

• Hawks who warn that rand pressure, sticky services inflation, and geopolitical risks (US tariffs, BRICS uncertainty) could force the SARB back into tightening.

📉 TLDR:
SARB surprised markets with a rate cut earlier this year, signalling a shift toward stimulating growth — but weak global sentiment, rand depreciation, and looming US trade risks are clouding the path ahead. For now, it’s a waiting game — with inflation data and politics holding the dice.

📖 Read more:

• IOL: SARB’s interest rate shift and your wallet

• S&P Global: PMIs and monetary policy

🧾 Glossary: Market Moves Explained

When the jargon hits harder than a load shedding schedule, we’ve got you. Here’s your quick decode of today’s financial buzzwords.

• Green Bond – A debt instrument where proceeds are exclusively used to finance or refinance environmentally sustainable projects. Vukile’s bond will support green buildings and upgrades.

• Headline PPI (Producer Price Index) – A measure of inflation at the producer level, tracking the average change in selling prices received by domestic producers. Key to understanding supply-side inflation trends.

• PMI Output Prices Index – A component of the Purchasing Managers’ Index that tracks changes in prices manufacturers receive for their products. A leading indicator for inflationary trends and monetary policy decisions.

• DMTN Programme – Domestic Medium-Term Note programme: a flexible debt issuance mechanism allowing companies to raise capital by issuing various tranches of bonds over time.

• Exchange Property Adjustment (Bonds) – When bond terms are modified due to corporate actions (like dividends). Shaftesbury Capital’s exchange bond saw its underlying value adjusted post-dividend.

😂 Meme of the Day

🧾 Final Word

The SARB blinked — and the market reacted. While the rate cut may have been justified by slowing inflation and weak growth, the timing couldn’t have been worse for the rand, which promptly took a knock.

What we’re seeing now is a central bank walking a tightrope: balancing policy space with external risk, all while trying not to rattle investor confidence. The message from Pretoria is clear — stimulate where we can, but expect limited moves unless politics and the rand allow it. For traders and businesses alike, it’s time to sharpen your inflation radar and watch Washington like a hawk.

It’s been a messy, meaningful week. Monday we reset — until then, rest easy and stay early.

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Mzansi Market Memo is compiled daily by Rayhaan @ the Memo for investors and operators who trade before the sun rises. *This memo is for informational purposes only. Not financial advice. Still, we’d buy low and read high.

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