RFA Breakfast Paper - August 5, 2026
South Africa's PMI Signals Marginal Private Sector Growth Amid Weak Demand
The S&P Global South Africa Purchasing Managers' Index (PMI) edged down to 50.3 in July 2026 from 50.5 in June, remaining just above the 50-point threshold and signaling a further, albeit slower, marginal improvement in private sector business conditions. Business activity returned to growth for the first time in three months, supported by easing inflationary pressures and improved operational efficiency. However, new orders declined for a third consecutive month, as weak consumer demand, political protests, and increased competition from lower-priced imports continued to weigh on domestic sales, although export orders expanded for a second straight month, providing some support to overall activity. On the cost front, input price inflation slowed to a four-month low and fell below its long-run average, aided by lower fuel prices and softer wage growth, while output price inflation eased to its weakest pace in five months, indicating a moderation in pricing pressures. Employment growth also softened to a six-month low, with firms adopting a more cautious approach to hiring amid subdued demand and ongoing supply chain disruptions. Despite these challenges, business confidence improved from June's near five-year low, suggesting that firms remain cautiously optimistic about the outlook as inflationary pressures continue to ease.
U.S. Markets Mixed as Earnings and Middle East Developments Shape Sentiment
U.S. equity markets closed mixed on Wednesday as investors balanced another busy round of corporate earnings with ongoing geopolitical developments in the Middle East. The tech-heavy Nasdaq Composite underperformed, falling about 0.8%, while the S&P 500 slipped 0.2%. The Dow Jones Industrial Average outperformed, gaining 0.5%. Market attention also remained on reports that an interim agreement to reopen the Strait of Hormuz could be announced in the near term, a development that could help ease concerns over global energy supplies. On the macroeconomic front, the ADP employment report showed private-sector payrolls increased by 44,000 in July, marking the smallest monthly gain in six months but still pointing to a broadly stable labor market.
NGX Edges Higher as Bargain Hunting Offsets Weak Market Breadth
The Nigerian equity market closed marginally higher on Wednesday, with the NGX All-Share Index (NGX-ASI) and Market Capitalization both advancing by 0.04%. Despite decliners outnumbering gainers, renewed bargain hunting in selected mid- and large-cap stocks, including FIRSTHOLDCO, FCMB, NESTLE, and MCNICHOLS, helped the market rebound modestly. Consequently, the benchmark index gained 109.41 points to close at 244,912.24, while Market Capitalization increased by ₦70.62 billion to ₦158.09 trillion. On the performance table, LINKASSURE led the gainers with a 9.94% advance, followed by AVACAP, FTGINSURE, MCNICHOLS, WAPIC, and FIRSTHOLDCO. On the downside, HONYFLOUR and PZ each declined by 9.94%, while ZICHIS, LEARNAFRCA, NEIMETH, AFRIPRUD, and LEGENDINT also recorded notable losses. Market breadth remained negative, with 20 gainers against 29 losers.
