RFA Breakfast Paper - August 3, 2026
South Africa's Manufacturing PMI Signals Continued Contraction
South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell to 46.8 in July 2026 from 47.3 in June, remaining below the 50-point threshold and signaling a second consecutive month of contraction in manufacturing activity. Despite the headline weakness, domestic demand and production continued to show signs of recovery, supported by shorter supplier delivery times, indicating some improvement in supply chain conditions. Inventories declined further as firms remained cautious about the sustainability of stronger demand, with some businesses also appearing to delay purchases in anticipation of lower input costs. Although input cost pressures remained elevated compared with the pre-war period, particularly with expected increases in diesel prices, the survey suggested that peak inflationary pressures have likely passed, provided global energy prices do not experience another sharp upswing. Looking ahead, business sentiment weakened as renewed tensions in the Middle East and rising oil prices raised concerns over the durability of the recent improvement in activity, highlighting the continued vulnerability of South Africa’s manufacturing sector to external geopolitical and energy market shocks.
U.S. Stocks Advance as Easing Geopolitical Tensions Lift Risk Sentiment
U.S. equity markets moved higher on Monday as easing geopolitical tensions, lower oil prices, and declining bond yields supported investor sentiment. Over the weekend, President Trump announced that planned military strikes against Iran would be delayed in favor of pursuing a diplomatic resolution. The development pushed WTI crude oil down roughly 5% to around $80 per barrel, while the yield on the 10-year U.S. Treasury securities fell below 4.70%. On the macroeconomic front, the ISM Manufacturing PMI climbed to its highest level since May 2022, signaling continued strengthening in U.S. manufacturing activity and suggesting that the goods-producing sector remains on a firmer footing despite broader economic uncertainties.
NGX Opens the Month Higher as Bargain Hunting Ends Recent Losing Streak
The Nigerian equity market opened the new month in positive territory, with the NGX All-Share Index (NGX-ASI) and Market Capitalization both advancing by 0.18%. The modest gain interrupted the market's recent bearish trend, supported by renewed bargain hunting and buying interest in medium- and large-cap stocks across key sectors. Consequently, the benchmark index gained 446.85 points to close at 245,730.53, while Market Capitalization increased by ₦288.44 billion to ₦158.61 trillion. Sectoral performance was mixed, with three of the five major sectors closing lower. The Insurance sector led the declines, falling 1.78%, followed by Consumer Goods (-0.18%) and Oil & Gas (-0.09%). Meanwhile, the Banking and Industrial Goods sectors posted gains of 0.75% and 0.21%, respectively.
