The industrial index clawed back losses in July, supported by strong performances by major rand hedge counters as the rand came under pressure over the month. Among the rand hedge counters, Naspers (+10.5%) led gains as the rally in Tencent continued in China, with Richemont (+2.0) and Steinhoff (+1.3%) also ending in positive territory.

British American Tobacco (-6.5%) bucked the trend. Despite releasing upbeat results for the first half, shares in British American Tobacco plunged following a radical proposal by the US Food and Drug Administration (FDA) to limit nicotine in cigarettes to non-addictive levels. As the pricing power of tobacco manufacturers lies in the fact that cigarettes are addictive, success by a regulator in this regard would certainly mark the end of combustible cigarettes. While the proposal by the FDA adds to the uncertainty in the tobacco industry, this is not expected have an immediate effect on the near-term profitability of the company.

Meanwhile, Richemont announced the resignation of its Head of Watchmaking, Marketing and Digital, Georges Kern, with immediate effect. The sudden resignation of Mr Kern leaves a void in leadership at a time when the company undergoes a revival in its high-end jewellery and watches. Hopefully the company will have capable internal candidates to move into this role.