Pluxee Boosts Full-Year Revenue Forecast for Second Time

LOCAL MARKET COMMENTARY

On Wednesday, South African assets rose, with the Top 40 index and the All Share index on the Johannesburg Stock Exchange closing 1.55% and 1.68% higher, respectively, ending at 73,681 and 80,773 points. However, private sector activity declined in June, as shown by the S&P Global South Africa Purchasing Managers' Index falling to 49.2 from 50.4 in May, indicating contraction. The decline was due to decreased output and new orders amid uncertainty following the May election. Additionally, Impala Platinum announced the end of a nearly week-long strike at its Bafokeng operations, which began on June 27 and involved contractors demanding permanent positions.

EUROPEAN MARKET COMMENTARY

European stocks closed higher on Wednesday, with the Stoxx 600 index up 0.8% and mining stocks leading the gains at 2.3%. Investors are on edge due to upcoming elections in the U.K. and France, with the U.K. likely to see a win for the opposition Labour Party, which markets favour. French election results are more uncertain. On Tuesday, markets had dropped after euro zone data showed headline inflation fell to 2.5% in June, but core and services inflation remained high at 2.9% and 4.1%, respectively.

US MARKET COMMENTARY

The S&P 500 and Nasdaq reached record highs on Wednesday as economic data suggested a weakening economy, raising hopes for a Federal Reserve interest rate cut in September. The Dow Jones Industrial Average fell slightly due to declines in healthcare and consumer stocks during a shortened session before the Fourth of July holiday. Thin trading volumes were expected for the week as markets closed on Thursday. Reports showed easing labor market conditions and weaker-than-expected PMI data, leading investors to bet over 70% on a rate cut in September according to LSEG's FedWatch.

ASIA MARKET COMMENTARY

Asia-Pacific markets were mostly up this morning, with Japan's Topix reaching an all-time high of 2,886.50, surpassing its December 1989 record. Japanese companies have given the biggest wage hikes in 30 years, with union-backed workers seeing an average pay increase of 5.1% this fiscal year. Larger firms raised wages by 5.19%, while smaller ones increased pay by 4.45%. Meanwhile, Hong Kong's Hang Seng index rose 0.23%, and Mainland China's CSI 300 was flat, despite Hong Kong's business activity falling for the second month in a row, with the composite PMI dropping to 48.2 in June.

COMMODITY MARKET COMMENTARY

Gold prices rose this morning due to softer-than-expected U.S. economic data, which raised hopes that the Federal Reserve might cut interest rates as early as September. Meanwhile, oil prices dropped in early trading after weaker U.S. employment and business activity data suggested a cooling economy in the world's top oil-consuming nation.

CURRENCY MARKET COMMENTARY

The South African rand got stronger on Wednesday as the country prepared for the swearing-in of ministers in President Cyril Ramaphosa's new unity government. The dollar weakened this morning following U.S. economic data indicating slowing growth. However, this provided little relief to the yen, which remained near a 38-year low, keeping the market wary of potential government intervention.

The Bidvest Group Limited (BVT) -0.34%

Bidvest has agreed to acquire 100% of Citron Hygiene LP from Birch Hill Equity Partners and other investors, pending approval from the UK Competition and Markets Authority, expected within five months. Citron, based in Toronto and founded in 1974, provides washroom hygiene products and services across the USA, Canada, and the UK, serving around 50,000 locations. With 90% recurring revenue, Citron's clientele includes sectors like manufacturing, hospitality, and healthcare. The acquisition aligns with Bidvest's strategy to expand its international hygiene services, benefiting from Citron's strong market position, experienced management, and growth potential, particularly in North America. Bidvest anticipates that Citron's integration will enhance its service offerings and geographic reach, especially in the USA and UK.

Pluxee N.V. (PLX) -1.19%

Pluxee, a French voucher and benefits company, upgraded its full-year organic revenue forecast for the second time this year after strong growth in the third quarter, especially in Latin America and other non-European markets. The company reported a 17.9% rise in quarterly organic revenue to €297 million ($320.52 million), with Latin America growing over 16% and other non-European markets over 42%. Previously spun off from Sodexo, Pluxee now expects 2024 organic revenue growth of about 18%, up from the 15-17% forecasted earlier. The company also maintained its annual earnings margin and mid-term targets.

Ford Motor Company (F) +0.00%

On Wednesday, Ford reported slower sales growth for the second quarter, similar to General Motors, due to a cyberattack that disrupted a key software system used by dealerships. Ford's sales rose by about 1% to 536,050 vehicles, a stark contrast to the 10% increase in 2023. Gas-powered vehicle sales dropped by 5%, while sales of electric and hybrid vehicles increased by about 61% and 55%, respectively. Toyota and Honda also experienced slower sales growth during this period.

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