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While global markets were mixed on Monday in reaction to Trump's latest tariffs, South Africa's rand initially weakened and government bond yields soared after he singled out the country for censure.
The impact of Trump's funding freeze will mostly be on more than $400 million of annual funding for the country's longstanding AIDS prevention and treatment program, but investors are concerned he may also set his sights on South Africa's preferential trade access to the US.
'USDZAR has seen some extreme price action as a result of headlines from the US,' Nedbank Group Ltd. analysts including Reezwana Sumad wrote in a note. 'Foreign-exchange markets remain at the mercy of headlines, primarily those related to tariff implementation and suspension of aid from the US at this time.'
The rand slumped as much as 1.4% before paring the decline to trade 0.1% weaker at 18.4280 per dollar by 11:32 a.m. in Johannesburg. Yields on 2035 government rand bonds climbed eight basis points to 10.51%.
Still, the reaction was relatively muted compared with the selloff that followed Trump's previous salvo against South Africa. The rand plunged as much as 2% on Feb. 3 after he first threatened to cut assistance to South Africa, claiming in a Truth Social post, without providing evidence, that the country was confiscating land.
'Absent these tensions with the US, we would expect the rand and SA bonds to rally' on the back of improving economic fundamentals, said Marek Drimal, a strategist at Societe Generale SA. 'However, given the continuing risk of potential further escalation of US-SA disagreements, we would prefer to only buy the rand and bonds on dips.'
Relations with Washington were already strained by South Africa's refusal to condemn Russia's invasion of Ukraine, and for its case in the International Court of Justice alleging Israel's assault in the Gaza Strip was an act of genocide.
They worsened last week after Trump and US Secretary of State Marco Rubio falsely claimed South Africa authorities are seizing property under the expropriation law. Both ignored President Cyril Ramaphosa's statement that the assertion is untrue.
The US has given South Africa more than $8 billion in bilateral aid over the past two decades, mostly for health programs. The country has also benefited from the Africa Growth and Opportunity Act, which allows duty-free access for some exports including agricultural commodities and motor vehicles.
The US is South Africa's largest trading partner after China, with two-way trade reaching $24 billion in 2023, according to data compiled by Bloomberg.
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There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Having said that, from a first glance at Tri-Mode System (M) Berhad (KLSE:TRIMODE) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Understanding Return On Capital Employed (ROCE) Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on Tri-Mode System (M) Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.028 = RM4.4m ÷ (RM173m - RM17m) (Based on the trailing twelve months to March 2025). So, Tri-Mode System (M) Berhad has an ROCE of 2.8%. Ultimately, that's a low return and it under-performs the Logistics industry average of 4.0%. Check out our latest analysis for Tri-Mode System (M) Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Tri-Mode System (M) Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Tri-Mode System (M) Berhad. What The Trend Of ROCE Can Tell Us In terms of Tri-Mode System (M) Berhad's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 3.5%, but since then they've fallen to 2.8%. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. If these investments prove successful, this can bode very well for long term stock performance. Our Take On Tri-Mode System (M) Berhad's ROCE While returns have fallen for Tri-Mode System (M) Berhad in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. These growth trends haven't led to growth returns though, since the stock has fallen 24% over the last five years. As a result, we'd recommend researching this stock further to uncover what other fundamentals of the business can show us. If you'd like to know more about Tri-Mode System (M) Berhad, we've spotted 5 warning signs, and 4 of them can't be ignored. While Tri-Mode System (M) Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
