Disney Hits 157M Ad-Supported Streaming Users, Prioritizes Growth Amid ARPU Dip

SOUTH AFRICAN MARKETS

The Top 40 index declined by 1.16%, closing at 74,526.8 points, while the All Share fell 1.18% to 83,152.6 points. South Africa's manufacturing sector contracted for the second consecutive month in December, as demand weakened, according to the purchasing managers' index (PMI). Additionally, the country's net foreign reserves decreased to $60.371 billion at the end of December, from $60.619 billion in November. Export sales also showed a downturn, with the supplier deliveries index rising above 50 points for the first time in three months.

EUROPEAN MARKETS

European equities retreated on Wednesday as bond yields surged following investor expectations of fewer interest rate cuts in Europe and the U.S. this year. Concerns about potential new tariffs under former President Donald Trump's administration also contributed to the negative sentiment. Economic data revealed a decline in German industrial orders and retail sales in November, while euro zone economic sentiment contracted in December. Yields on European government bonds rose, with the German 10-year benchmark reaching its highest level in over five months, mirroring a similar rise in U.S. Treasury yields.

US MARKETS

U.S. stocks ended the session with little movement on Wednesday as investors weighed two conflicting sets of jobs data. A report from ADP indicated a sharp slowdown in private payroll growth for December, while a separate Labor Department report showed a decrease in jobless claims. Market attention will shift to the U.S. government's December employment report, scheduled for release on Friday. U.S. markets will be closed on Thursday for a national day of mourning in honor of former President Jimmy Carter.

ASIAN MARKETS

Asia-Pacific markets faced a decline this morning as investors worried the Federal Reserve may delay easing its policy due to inflation concerns. Meanwhile, China's persistent consumer disinflation continued to dampen market sentiment. China's December inflation data showed a slight 0.1% increase in the consumer price index, while the producer price index dropped 2.3% year-on-year for the 27th consecutive month. Australia's goods trade surplus surged to a 10-month high in November, reaching 7.08 billion Australian dollars ($4.39 billion), as export growth outpaced imports amid sluggish domestic demand.

COMMODITY MARKETS

Gold prices reached a near four-week high on Wednesday after weaker-than-expected private employment data for December bolstered hopes that the U.S. Federal Reserve may ease rates this year. Oil prices fell this morning, continuing the losses from the previous day, driven by a substantial increase in U.S. fuel inventories. However, concerns about tighter supplies from OPEC members and Russia helped limit the decline. A Reuters survey showed a drop in oil output from OPEC in December, despite higher production in Nigeria and elsewhere.

CURRENCY MARKETS

The South African rand weakened on Wednesday, pressured by a strong U.S. dollar and disappointing domestic economic data. The U.S. dollar surged, underpinned by rising Treasury yields, pushing the yen, sterling, and euro to multi-month lows amid tariff concerns. Brazil experienced a net outflow of $18.01 billion in 2024, the largest since 2020, primarily driven by financial segment outflows such as foreign investments and profit remittances, despite a net inflow from the commercial sector related to exports and imports.

 Wesizwe Platinum Limited (WEZ) -8.11%

Wesizwe shareholders are advised of the latest developments regarding the Company’s Going Concern status, building on the previous update provided on 14 October 2024. The process to extend the funding cap beyond US$1.519 billion, which requires approval from the China National Development and Reform Committee (NDRC), is still ongoing. Wesizwe, in collaboration with Jinchuan HK and Jinchuan Group, is actively finalizing the updated funding application report for the Bakubung Project, with completion anticipated by the end of June 2025. The Majority Shareholder has reaffirmed its commitment to Wesizwe, extending loans totalling US$156 million that matured in December 2024 by three years to December 2027 and advancing an additional US$90.75 million since the last update to support the Bakubung Project. With the Majority Shareholder’s continued backing and anticipated NDRC approval, the directors are confident that Wesizwe will secure the required funding to meet its financial obligations and achieve the operational completion of the Bakubung Project. The Company extends its gratitude to shareholders for their ongoing trust and support and will continue to provide updates as appropriate.

Gemfields Group Limited (GML) -10.00%

Gemfields has announced the reinstatement of a 15% export duty on Zambian gemstones under S.I. No. 88 of 2024, effective 1 January 2025, affecting emeralds mined by Kagem Mining Limited (75% owned by Gemfields). This raises the effective tax on revenues to 21% (including a 6% mineral royalty tax) alongside a 30% corporation tax. Comparatively, Brazil and Colombia, major emerald exporters, levy revenue taxes of 2% and 2.5%, respectively. In 2023, Kagem contributed 31% of its revenues to the Zambian Government without the export duty. The reinstatement, implemented without consultation, forms part of broader revenue measures. Gemfields plans to engage with the Zambian Government to advocate for reinstating the suspension or removing the duty, citing concerns over sustainability and investment attractiveness.

The Walt Disney Company (DIS) -1.46%

Disney reported on Wednesday that its streaming platforms—Disney+, Hulu, and ESPN+—had a combined 157 million global monthly active users engaging with ad-supported content over the past six months, with 112 million of these users based domestically. Although there is no industry-standard methodology for measuring global streaming advertising audiences, these figures underscore Disney's successful transition to ad-supported models. CEO Bob Iger highlighted the company’s ongoing strategy to encourage customers to adopt ad-supported options, further reinforced by price hikes for commercial-free subscriptions following the launch of Disney+ with ads in late 2022. As of November, Disney+ Core (excluding Disney+ Hotstar in India and adjacent regions) reported 122.7 million subscribers, while Hulu had 52 million, and ESPN+ had 25.6 million paid subscribers. Notably, the average revenue per user (ARPU) for domestic Disney+ users saw a slight decline, from $7.74 to $7.70, driven by a greater proportion of subscribers on the lower-priced, ad-supported tier and wholesale arrangements. Disney is set to announce its fiscal first-quarter earnings on February 5, offering additional insights into the company's streaming business performance.

Shell plc (SHEL) -1.43%

Shell announced a reduction in its liquefied natural gas (LNG) production outlook for the fourth quarter and forecasted significantly lower oil and gas trading results compared to the previous quarter. In a trading update ahead of its full-year results, scheduled for January 30, the company also disclosed it would incur non-cash, post-tax impairments in the range of $1.5 billion to $3 billion, with up to $1.2 billion attributed to its renewables division, primarily related to European and North American assets. Following record earnings in 2022 and 2023, Shell, like other major oil and gas firms, has faced a decline in profits throughout 2024, as energy prices stabilized, and global oil demand slowed. The company also noted that its LNG trading division's performance in the fourth quarter would be considerably weaker, largely due to the expiration of hedging contracts taken in 2022 to mitigate risks associated with the potential loss of Russian production after the Ukraine invasion.

Would you prefer a full in-depth report that you can read offline? Click here to download the full report.