Trading update : 19 March 2026

Apollo is warning that concentration risk is rising in the already top-heavy S&P 500, with expected AI and tech IPOs later this year set to dilute diversification even further. For tech investors, looking East is an increasingly popular move as the AI race between Alibaba and Tencent hots up. Whichever side of the pond you choose to invest, the shipping bottleneck in the Strait of Hormuz threatens to send chip prices into orbit due to higher energy costs.

The question is, who will absorb these price hikes?

The risk-off sentiment from the war is also hitting home, as the resurgence in the US dollar batters the rand, and surging oil prices put further potential rate-cuts on hold… or worse.

Concentrated risk

Insights from Apollo highlight the growing concentration risk in the S&P 500 (VOO-NASDAQ). The 10 biggest companies in the index already account for almost 40%, and if Anthropic, OpenAI, and SpaceX are added later this year, the concentration could approach 50%. The bottom line is that the S&P 500 basically doesn’t offer much diversification anymore.

AI heavyweight battle

Morgan Stanley elevated Alibaba as a global AI leader, replacing Prosus (PRX-JSE) and Naspers (NPN-JSE)-owned Tencent. Analysts cited its top-tier in-house AI chips, cloud infrastructure, state-of-the-art open-weight models and consumption-focused applications. “We think owning the full AI stack (chips, cloud, models, applications) forms a structural advantage,” according to analyst comments carried by Bloomberg. Tencent benefits from the strength of the WeChat ecosystem, making it a “late starter, but quick follower” despite its current lag. Tencent is seizing the moment as agentic AI fever grips China, introducing products to tap enthusiasm for OpenClaw and leveraging its 1.4 billion-user base.

Chips for China

Bloomberg reported that Nvidia Corp. (NVDA-NASQ) Chief Executive Officer Jensen Huang said the company is firing up manufacturing of H200 AI accelerators for customers in China.

Power struggle

The closure of the Strait of Hormuz is threatening to drive up energy costs for major chipmakers in Asia. While this is a potential headache for the likes of Micron Technology (MU-NASQ) and Sandisk Corporation (SNDK-NASQ), which manufacture outside the US, demand for chips is so strong that suppliers are likely to be able to pass a lot of those costs on to customers. According to Bloomberg, the AI boom has been running into problems with capacity, boosting the price tag for memory chips needed both for AI servers and for more mundane tech items, such as phones and desktop PCs. Demand for memory has outstripped the ability of the industry to supply it. Now, the conflict in the Middle East risks choking off chip supply. With prices already up more than fivefold since 2024, the market could see another price spike as more expensive energy, or even shortages, slow output and raise costs for manufacturers.

Chief among them

BHP Group (BHPL-TRQX) has appointed Brandon Craig as its new chief executive. According to a Bloomberg report, Craig is a 25-year-plus veteran at the company and has a reputation for operational nous, having run the company’s giant iron ore division and its Americas operations.

Into reverse

Bloomberg reports that US-listed emerging-market exchange-traded funds (ETFs) have seen a reversal in flows. Following a long stretch of inflows, investors withdrew funds in response to rising risks due to the Iran conflict, with outflows totalling $2.35 billion in the week ended March 13.

Continental competition

Africa’s data centre expansion is accelerating, but grid capacity and electricity costs will determine where projects are ultimately delivered. Data shared by BloombergNEF, South Africa accounts for roughly three-quarters of installed capacity and has drawn development from hyperscalers, including Amazon Web Services (AMZN-NASQ). Kenya, Nigeria and Egypt are among the other markets expanding from smaller bases. As data centre capacity expands across the continent, countries with lower electricity prices and stronger grid reliability, including Ethiopia and Morocco, may attract more development.

Rand bears

After the US and Israel attacked Iran, the US dollar roared back to life as a stock-market hedge, hitting its strongest inverse correlation with equities in nearly a year. Strategists quoted by Bloomberg say the shift is driven by soaring crude, boosting the greenback as the world’s top oil producer benefits. The stronger greenback and risk-off sentiment for emerging markets saw one-month risk reversals for the ZAR/USD pair – the premium of options to sell the currency over those to buy it – climb to the highest level since April 2020, signalling that traders are bracing for steeper calls.

Fading hopes 

Expectations for a near-term interest rate cut in South Africa are evaporating, with economists shifting their calls to the third quarter and traders pricing in no easing this year, with potential risks of further tightening as inflation pressures re-emerge.

Making headlines 

Remgro (REM-JSE) shares rallied as much 3.8% – the most since September – after the investment company said it expects headline earnings per share (HEPS) for the six months ended December 31 of between 914 cents and 948 cents versus 672 cents a year earlier. The improvement was driven by better operational performances from most investee companies.

Inflation expectation

The Bureau for Economic Research (BER) published its Q126 inflation expectations survey, which would have supported a 25bps rate cut at the SARB’s March monetary policy meeting (MPC). However, due to the period under review, the recent surge in oil prices was not factored in. Any cuts are now unlikely given the unfolding hostilities in the Middle East and the highly uncertain outlook for oil prices. Over a five-year period, expectations are for inflation to remain stable, but a lot will hinge on how long the conflict continues and any lingering impact on shipping.

Cost cutting

Spar Group (SPP-JSE) is cutting jobs as it grapples with operational and governance challenges, adding fresh pressure on South Africa’s second-largest grocer that saw the sudden departure of its chief last month. The Durban-based company will start a voluntary severance program as part of efforts to rein in costs and stabilise performance.

On the defensive 

Mr Price (MRP-JSE) CEO Mark Blair has defended the purchase of NKD, explaining that the clothing retailer has pursued the deal despite investor concerns to gain a scaled platform for earnings diversification. Europe’s retail market is roughly 17 times larger than South Africa’s, underscoring the scale of the opportunity, despite competition, explained Blair. Sluggish growth at home has pushed South African retailers to seek new avenues for expansion, including moving into banking.