RFA Breakfast Paper - June 2, 2026
South African Business Confidence Falls as Middle East Conflict Weighs on Sentiment
The RMB/BER Business Confidence Index in South Africa fell by 8 points to 39 in Q2 2026, reversing the gains recorded over the previous two quarters and dropping slightly below its long-term average of 40. The reading marks the lowest level since Q3 2025, reflecting growing concerns among businesses about the economic fallout from the ongoing Middle East conflict. Confidence weakened across all surveyed sectors, with the sharpest declines recorded in consumer-facing industries. Businesses reported that heightened uncertainty over the outlook for inflation, interest rates, and economic growth had made both companies and consumers more cautious. According to Isaah Mhlanga, firms have had to adapt quickly to a less supportive economic environment, with many respondents noting that clients have become increasingly hesitant to make spending and investment decisions. The decline in confidence suggests that geopolitical tensions and tighter financial conditions are beginning to weigh more heavily on domestic economic activity. The latest survey points to a more challenging business environment in the months ahead, as elevated uncertainty continues to dampen corporate sentiment and investment appetite.
U.S. Equities Gain as Strong Job Openings Data Boosts Economic Confidence
U.S. equities closed higher on Tuesday as investors reacted positively to stronger-than-expected labor-market data ahead of Friday’s closely watched employment report. April JOLTS job openings rose to 7.6 million, their highest level since May 2024, signaling continued strength in labor demand. Most S&P 500 sectors advanced, led by materials, energy, and industrials, while the Russell 2000 gained 0.9%. Communication services lagged following weakness in Alphabet shares after the company announced plans to raise $80 billion to support AI investments. The upbeat labor data reinforced confidence in the resilience of the U.S. economy, supporting gains in cyclical sectors and small-cap stocks. Investors now await Friday’s payrolls report for further clues on economic momentum and the interest-rate outlook. Meanwhile, Treasury yields were little changed, with the 10-year yield at 4.45% and the 2-year yield at 4.05%, while WTI crude oil rose to around $94 per barrel amid continued uncertainty surrounding U.S.–Iran negotiations. Overall, markets remain focused on upcoming labor-market data for further confirmation of the economy’s strength and the likely path of monetary policy.
NGX Slides Further as Profit-Taking Continues to Dominate Trading Activity
The Nigerian equity market extended its bearish run on Wednesday as sustained profit-taking across major sectors weighed on investor sentiment. The NGX All-Share Index declined by 0.35% to close at 246,686.66 points, while market capitalization fell by 0.30% to ₦158.22 trillion. The decline came despite the additional listing of 600 million ordinary shares of Fidson Healthcare, which moderated the drop in market capitalization. Market breadth remained weak as investors continued to lock in gains from recent rallies, resulting in broad-based losses across the market. Trading activity also softened significantly, with total volume and value traded declining by 36.27% and 33.82%, respectively, to 718.77 million shares worth ₦29.31 billion across 71,683 deals. The weaker turnover suggests a cautious market environment, with investors showing limited appetite for aggressive buying amid ongoing portfolio rebalancing. While the recent selloff reflects short-term profit-taking rather than a deterioration in market fundamentals, the absence of strong buying support has allowed bearish sentiment to persist. Investors are expected to remain focused on corporate earnings expectations, liquidity conditions, and opportunities in fundamentally sound stocks as the market searches for a new direction. Overall, sustained bargain-hunting will be needed to stabilize sentiment and slow the pace of the current market correction.
