RFA Breakfast Paper - June 29
South Africa's Money Supply Hits Record High Despite Slight Slowdown in Growth
Broad money supply (M3) in South Africa grew 9.59% year-on-year in May 2026, easing slightly from 9.82% in April, while reaching a new record high of ZAR 6.08 trillion. Although the pace of annual growth moderated marginally, the continued expansion in liquidity suggests that monetary conditions remain relatively supportive despite the South African Reserve Bank's recent policy tightening. The steady increase in money supply reflects ongoing growth in deposits and credit
within the financial system, which could continue to underpin economic activity. However, with inflation having accelerated in recent months, sustained growth in M3 may also contribute to underlying price pressures if liquidity continues to outpace economic output. Historically, South Africa's M3 has averaged ZAR 1.20 trillion since 1965, making the latest reading of ZAR 6.08 trillion the highest on record.
U.S. Equities Extend Gains as Technology Stocks Rebound
U.S. equities opened the week higher as investors returned to technology stocks following last week's AI-driven pullback, lifting the major indices. The Dow Jones Industrial Average reached a fresh record high, while communication services, consumer discretionary, and technology led the market's gains. Alphabet surged 5% in its first trading session as a Dow component after replacing Verizon, providing additional support to the communication services sector. Meanwhile, WTI crude oil rebounded above $70 per barrel after falling 9% last week to pre-war levels, helping improve sentiment toward energy stocks. The market's performance reflected renewed confidence in growth-oriented sectors, with investors viewing last week's weakness as a buying opportunity rather than the start of a broader correction. Alphabet's strong debut in the Dow reinforced optimism around large-cap technology stocks, while the recovery in oil prices
improved sentiment toward energy shares. Overall, the session highlighted continued investor confidence in U.S. equities, supported by expectations of resilient corporate earnings and a stable economic backdrop despite lingering macroeconomic uncertainties.
Nigerian Equities Open the Week Lower as Profit Taking Deepens Market Losses
The Nigerian equity market opened the week on a weaker note as sustained profit-taking and cautious investor sentiment extended last week's bearish momentum. The NGX All-Share Index (NGX-ASI) declined 1.59%, shedding 3,682.70 points to close at 228,366.32, while market capitalization fell by ₦2.36 trillion, or 1.59%, to ₦146.54 trillion. Selling pressure in mid-cap and blue-chip stocks weighed heavily on the market, triggering broad-based losses across all major sectors and reflecting investors' cautious approach at the start of the week. Despite the sharp decline, trading activity strengthened considerably, suggesting that investors remained active as they repositioned their portfolios. Total trading volume surged 156.37% to 996.47 million shares, while the value of transactions jumped 137.27% to ₦43.73 billion across 61,813 deals. The increase in market turnover amid falling prices indicates that sellers continued to dominate trading, with investors taking profits and reducing exposure in the absence of strong positive catalysts. Overall, the session points to lingering caution in the Nigerian equity market, with near-term sentiment likely to remain driven by earnings expectations, valuation opportunities, and broader macroeconomic developments.
