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The Monetary Policy Committee (MPC) at the South African Reserve Bank (Sarb) will meet on Wednesday and Thursday to deliberate on monetary policy for the second time since the conflict in the Middle East started.<\/p>\n
Since the previous MPC meeting in March, there has been a brief ceasefire,while peace talks between the US and Iran continue but have yet to yield a resolution. The Strait of Hormuz is still largely closed, disrupting global supply chains and keeping energy, gas, and fertiliser prices high.<\/p>\n
The war-driven supply shock that initially pushed energy costs up is now lifting consumer inflation and worsening the near-term outlook.<\/p>\n
In April, headline inflation rose to 4.0% up from 3.1% in March, driven mainly by the immediate effects of higher transport costs.<\/p>\n
Economists at FNB believe more important, however, is the likely spillover into a wider range of goods and services.<\/p>\n
\u201cSome market expectations for 2026 have been revised from around 3% at the start of this year to north of 4% currently. This reflects sticky oil prices, rising distribution costs that are likely to shape retail pricing, and the risk that future planting seasons could be disrupted by shortages of key inputs and adverse weather conditions,\u201d the bank said in a note on Friday.<\/p>\n
Read: War weighs on global growth<\/p>\n
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At the March MPC meeting, forecasts had not yet fully captured the scale of the conflict.<\/p>\n
When the Sarb\u2019s MPC meets this week, FNB says the central bank will likely provide a clearer indication of its assessment of the second-round effects of the war and the risk of persistently higher inflation expectations.<\/p>\n
\u201cIn our view, the question is less whether policy needs to tighten and more how quickly the tightening will proceed.\u201d<\/p>\n
FNB says the broader lesson is that hopes for a quick resolution to geopolitical shocks are often misplaced.<\/p>\n
Even when markets gradually adjust and risk premia begins to normalise, the initial inflation impulse still requires a policy response.<\/p>\n
\u201cOverall, a rate hike appears imminent.\u201d<\/p>\n
Patrick Buthelezi, economist at Sanlam Investments, agrees that the Sarb faces mounting pressure to hike rates and defend its inflation-targeting credibility.<\/p>\n
The Global Supply Chain Pressure Index has risen to its highest level since 2022, when Russia invaded Ukraine.<\/p>\n
Buthelezi says this is raising inflation fears globally.<\/p>\n
\u201cThis conflict will prove to be the greatest test for the Sarb\u2019s newly adopted target of 3%,\u201d he also told Moneyweb on Friday.<\/p>\n
\u201cWe expect the Sarb to hike interest rates to curb the second-round effect and reinforce its credibility. While we don\u2019t expect the beginning of the steep hiking cycle, a prolonged conflict raises the risk of another hike.\u201d<\/p>\n
Reserve Bank Governor Lesetja Kganyago will announce the outcomes of the meeting on Thursday afternoon, including the vote of newly appointed sixth MPC member Konstantin Makrelov, who replaces retired Chris Loewald as chief economist.<\/p>\n
The benchmark repo rate was kept unchanged at 6.75% in March, while the prime lending rate sits at 10.25%.<\/p>\n
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SA set for rate hike as war fuels inflation
\nSarb to hike next week to save some pain later?<\/p>\n
On the corporate front, it will be a busy week\u00a0locally,\u00a0with full-year results expected from:<\/p>\n
Pick n Pay (Monday): In the retailer\u2019s last 48-week update, the headline loss per share was set to increase by more than 20% year-on-year, at least 12.31 cents worse than the prior year\u2019s loss of 61.54 cents. This deterioration is attributed to turnover coming in below management\u2019s expectations, which impacted the group\u2019s previous guidance for the 2026 financial year. Total group turnover grew by 3.2% year-on-year, and by 3.4% on a like-for-like basis, reflecting a modest top-line performance given prevailing market headwinds. For 2026, the market expects adjusted earnings per share (EPS) to improve 5.5% to a loss of 58.2 cents and revenue to grow 3.2% to R122.4 billion.<\/p>\n
Altron (Tuesday): In the technology group\u2019s recent operational update, the revenue performance in the period was underpinned by strength in its Platforms division, which delivered double-digit growth, although this was offset by a decrease in revenue in the IT services segment. The Platforms business contributed about 45% to revenue and roughly 90% to both earnings before interest, taxes, depreciation and amortisation (Ebitda) and operating profit on the back of solid demand, while IT Services was impacted by the constrained operating environment. Ebitda from continuing operations grew in the low-double-digit year-to-date and operating profit grew more than 20%, but increased in the low-to-mid teens excluding the change in Netstar\u2019s depreciation policy. For the 2026 financial year, the market expects adjusted EPS to jump 34.1% to R2.32 and revenue to uptick 1.2% to R9.7 billion.<\/p>\n
Burstone Group (Wednesday): In a recent pre-close trading update, distributable earnings are expected to grow by between 2% to 3% for the real estate business (previously Investec Property Fund), in line with the lower end of full-year guidance. This expected performance would result in distributable income per share (Dips) of between 104.60 cents to 105.56 cents (2025: 102.47 cents), with the payout ratio being maintained at 90%. Net property income from the South African portfolio is expected to grow by 4% to 5% on a like-for-like basis, primarily due to a strong performance in the retail portfolio together with a steady performance across office and industrial assets. For 2026, the market expects adjusted EPS to improve to R1.03 from a loss of R2.81.<\/p>\n
Emira Property Fund (Wednesday): In its pre-close operational update, the local commercial portfolio performed in line with expectations, with total vacancies growing to 4.5%, primarily due to a recent vacancy at Menlyn Corporate Park. Tenant retention remains a key focus, with 87.3% (by gross rental) of matured leases being retained. Management noted that the group is on track to meet its objectives for 2026. The market expects adjusted EPS to come in at R1.31.<\/p>\n
Tsogo Sun delivered a decent performance in the first half of 2026, which saw headline earnings per share (Heps) grow 1% year-on-year to 73.9 cents. Total income however fell 1% to R5.6 billion and adjusted Ebitda was down 3% to R1.7 billion at a 30.9% margin. Online betting returned to profitability from August, while the hotels division recorded solid growth in room revenue and adjusted Ebitda. However, the casinos segment was weighed down by weaker slot machine revenue. For 2026, the market expects adjusted EPS to increase 1.4% to R1.44 and revenue to decline by just under 1% to R11.2 billion when the group releases its results on Thursday.<\/p>\n
Read: Tsogo Sun\u2019s Somerset West casino relocation hits major roadblock<\/p>\n
Dis-Chem Pharmacies: Per a recent 24-week trading statement, revenue grew by 10.1% year-on-year, driven by the successful launch and rapid uptake of its Better Rewards loyalty programme, as well as increased demand in both the retail and wholesale segments. The retail footprint continued to expand, with the group operating 355 retail stores. For 2026, the market expects adjusted EPS to grow 3.4% to R1.42 and revenue to jump 9.6% to R42.9 billion.<\/p>\n
Interim results are expected from:<\/p>\n
Netcare (Monday): In its five-month update, the private healthcare group reported that revenue rose 4.5% year-on-year, in line with management\u2019s target range of 4%-5%.. Total operating costs were well contained, and notwithstanding lower activity levels, Ebitda margins increased slightly over the period. Total normalised paid patient days grew 0.8% (acute hospitals: +0.5%, mental health facilities: +2.9%). For the first half of 2026, the market expects adjusted EPS to jump 13.95% to R0.67 and revenue to grow 4.8% to R13.3 billion.<\/p>\n
Life Healthcare Group ended the year strong after normalised earnings per share from continuing operations increased 10.1% to 100.3 cents in 2025. Revenue grew 6% to R25.1 billion, driven by paid patient days increasing 1.1% and a 5.1% tariff increase. Normalised Ebitda rose 4.7% to R3.8 billion, with the margin coming in at 15.3% (2024: 15.5%). For the current year, management anticipates that the group will continue to grow its underlying asset base in strategic locations. For the first six months of 2026, the market expects adjusted EPS to decline 13.2% to R0.59 and revenue to increase 3.6% to R12.7 billion on Thursday.<\/p>\n
Pepkor Holdings delivered a strong first quarter, which saw revenue from continuing operations increase by 12.9% year-on-year, reaching R29.9 billion. Excluding the contribution from recent acquisitions, group revenue rose 8.3% year-on-year. This performance was driven by strength in the clothing and general merchandise segment, Furniture, appliances and electronics segment, and financial services segment. Guidance and outlook provided by management highlighted that sales momentum accelerated into January 2026, with group sales up 12.3% year-on-year in the first three weeks. For the half-year, the market expects adjusted EPS to increase 8.6% to R0.91 and revenue to grow 8.7% to R53 billion on Wednesday.<\/p>\n
Read: Pepkor has more stores \u2018than Ikea, Target and Primark combined\u2019<\/p>\n
Also on Monday, Old Mutual is also expected to release a quarter one update.<\/p>\n
The financial services group ended the year strong after adjusted Heps increased 26% year-on-year to 189.8 cents, supported by strong results from operations and exceptional shareholder investment returns, particularly in the South African and Malawian equity markets. Results from operations (RFO) rose 13% to R9.8 billion. Funds under management increased 13% year-on-year to R1.64 trillion, benefitting from a strong equity market performance and net inflows in wealth management and Old Mutual Africa regions.<\/p>\n
#week #ahead #Sarb #MPC #results #PnP #Altron #Emira #DisChem<\/p>\n","protected":false},"excerpt":{"rendered":"
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