Disney Smashes Expectations as Disney+ Soars and Theme Parks Shine

Local Market Commentary

South African equities closed weaker on Wednesday, with the Top 40 and All Share indices down 0.65% and 0.58% respectively, ending at 83,992.6 and 91,496.6 points, as investor sentiment was weighed down by a downgraded GDP growth forecast and heightened political risk. The Bureau for Economic Research revised its 2025 growth outlook to 1.5% (from 2.0%), aligning with consensus estimates, citing political instability and external trade pressures. Political uncertainty intensified as the Democratic Alliance tabled motions of no confidence against Johannesburg Mayor Dada Morero and City Council Speaker Nobuhle Mthembu, underscoring continued governance volatility in the country’s economic centre.

European Market Commentary

European equities retreated on Wednesday, with the STOXX 600 down 0.5%, as markets paused after recent gains and investors awaited the US Fed’s rate decision. Regional economic data were mixed: Italian retail sales contracted 0.5% month-on-month in March, with a 2.8% year-on-year decline in value terms, while Germany posted a stronger-than-expected 3.6% rise in industrial orders, hinting at potential recovery. Meanwhile, Russia reported a YTD budget deficit of 3.2 trillion roubles (1.5% of GDP), up from 0.6% a year earlier, attributed to front-loaded spending.

U.S. Market Commentary

U.S. equities closed higher on Wednesday amid volatile trading, lifted late by a semiconductor rally following reports of potential easing in AI chip regulations. The Federal Reserve held interest rates steady as expected, with Chair Powell highlighting heightened risks to both inflation and unemployment, while noting that future rate cuts remain possible but data-dependent. Market participants continue to price in a 25bps rate cut by July. Sentiment was also supported by news of upcoming U.S.-China trade talks in Switzerland, though President Trump reaffirmed his stance on maintaining aggressive tariffs, casting uncertainty over any near-term resolution.

Asia Market Commentary

Asia-Pacific markets were mixed on Thursday as investors digested the Fed’s rate hold and fresh policy easing from the People’s Bank of China, which cut its seven-day reverse repo rate by 10bps to 1.4%, injecting 158.6 billion yuan in liquidity. In macro data, the Philippine economy grew 5.4% year-on-year in Q1 2025, slightly below expectations. Meanwhile, South Korea’s LG Electronics announced plans to build a $600 million manufacturing plant in India—its third in the country—expected to be operational by end-2026 with significant annual production capacity across appliances.

Commodity Market Commentary

Gold prices rose on Thursday as the Federal Reserve’s warnings about inflation and labor market risks fueled economic uncertainty, with investors also awaiting the outcome of U.S.-China trade talks. Oil prices stabilised after a more than $1 drop in the previous session, weighed down by concerns over trade talks between the world’s largest oil consumers, the U.S. and China. Additionally, rising U.S. gasoline inventories sparked fears of weaker demand as the summer driving season approaches, while OPEC+ plans to increase output, adding further downward pressure on oil prices.

Currency Market Commentary

The South African rand weakened on Wednesday as investors took profits after a strong run against the dollar. On Thursday, the pound surged, alongside the Australian dollar, after U.S. President Trump signalled an imminent "major trade deal" with Britain. The U.S. dollar gained modestly against the yen and euro, while market participants analysed the Federal Reserve's post-meeting statement. The Fed kept interest rates unchanged, noting heightened uncertainty in the economic outlook and increasing risks to both inflation and employment. Ongoing trade negotiation uncertainties also continued to dampen investor sentiment.

Datatec Limited (DTC) +0.42%

Datatec anticipates a material increase in earnings for the year ended 28 February 2025 (FY25), driven by robust contributions from Westcon International and Logicalis International, alongside an improved performance from Logicalis Latin America. Underlying earnings per share are expected to range between 30.0 and 31.0 US cents — a 75% to 81% increase on the recalculated FY24 base of 17.1 US cents, reflecting revised alignment with Adjusted EBITDA. Headline earnings per share are forecast to rise by 76% to 83% to 25.0–26.0 US cents, while basic EPS is set to increase by 23% to 28% to the same range. The company plans to release its full-year results on or around 27 May 2025.

DRDGOLD Limited (DRD) +3.43%

DRDGOLD delivered a 4% sequential increase in revenue to R1.87 billion for the quarter, supported by a 10% increase in the average gold price. This helped offset a 12% decline in production to 1,093kg, which was impacted by adverse weather affecting throughput and yield. While gold sales dipped marginally, cash operating costs remained stable in absolute terms, with unit costs rising 10% to R964,235/kg. All-in sustaining costs increased 8% to R1.07 million/kg, largely due to lower production and ongoing sustaining capital spend. Adjusted EBITDA declined by 2% to R761.7 million. Nonetheless, the company’s cash position strengthened to R950.5 million following a R258.7 million interim dividend, supporting the potential for a final dividend in August 2025. Management notes a risk of slightly missing FY25 production guidance of 155,000–165,000oz, with unit costs likely to exceed the revised guidance. The company is also transitioning its ADR depository to J.P. Morgan.

Universal Partners Limited (UPL) 0.00%

Universal Partners reported a notable decline in net asset value per share for the quarter ended 31 March 2025, falling to GBP 1.173 (ZAR 27.95) from GBP 1.293 (ZAR 30.74) in the prior period. The quarterly loss widened to GBP 1.66 million, translating to a loss per share of 2.28 pence, compared to 0.37 pence a year earlier. For the nine months to 31 March 2025, cumulative losses deepened to GBP 8.64 million (11.86 pence per share), reflecting heightened pressure across the investment portfolio and broader market headwinds.

Walt Disney Company (DIS) +10.76%

Walt Disney reported a strong quarter, exceeding expectations despite ongoing tariff uncertainties. The company posted adjusted earnings per share of $1.45 for the January-to-March period, surpassing analysts' consensus of $1.20. Revenue rose 7% to $23.6 billion, above the expected $23.14 billion, driven by a significant boost in Disney+ subscribers, who increased by 1.4 million, and strong results from its theme parks. Operating income reached $4.4 billion, with the streaming division's operating income rising to $336 million, up from $47 million a year earlier. Disney maintained its optimistic outlook, forecasting a 16% increase in adjusted earnings per share for fiscal 2025 and double-digit operating income growth in its entertainment unit.

Uber Technologies Inc. (UBER) -2.54%

Uber reported its slowest revenue growth since the pandemic in Q1, with a 14% increase to $11.53 billion, missing analysts' estimates of $11.62 billion. The ride-hailing unit saw a 15% revenue rise, while the delivery segment grew by 18%. U.S. travel demand weakness, compounded by trade policy uncertainty, weighed on growth, with data showing a drop in foreign spending on U.S. travel. However, Uber's international expansion and partnerships with autonomous taxi operators provided optimism. The company forecast Q2 gross bookings between $45.75 billion and $47.25 billion and adjusted core earnings of $2.02 billion to $2.12 billion, above Wall Street's expectations.

ANZ Group Holdings Limited (ANZ) +0.47%

Australia's ANZ Group reported flat first-half cash earnings of A$3.57 billion for the six months to March 31, slightly above the A$3.54 billion consensus estimate. Despite a 3% growth in home loans and a 4% rise in core institutional lending, the bank faced margin pressure with a stable net interest margin of 1.56%, and impairments increased 48% to A$2.52 billion, driven by home loan restructuring. ANZ also benefited from the strong performance of Suncorp Bank, acquired for A$4.5 billion. The bank's results come as Shayne Elliott concludes his nearly 10-year tenure as CEO, with Nuno Matos set to take over. ANZ is addressing non-financial risk issues, including an investigation into its institutional division's handling of government bond auctions. The bank declared an interim dividend of 83 cents per share, unchanged from the prior year.

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