In today's Taking Stock, OpenAI reported on Monday that its annualised revenue run rate has surged to $10 billion as of June, positioning it to meet its full-year target amid accelerating AI adoption.
Local Market Commentary
The South African All Share and Top 40 indices edged higher by 0.05% and 0.1% respectively, closing near 96,414 and 88,686 points. Market focus turns to key domestic data releases this week, including April’s manufacturing and mining outputs. Parliamentary approval of delayed fiscal and revenue proposals is expected midweek amid political delays. The World Bank’s $1.5 billion loan aims to support structural reforms in infrastructure sectors critical to economic growth and employment. However, climate-driven policies like carbon border adjustments pose risks to over 420,000 export-related jobs, underscoring challenges for South Africa’s export competitiveness and state enterprise modernisation agenda.
European Market Commentary
European equities softened as investors adopted a cautious stance ahead of ongoing Sino-U.S. trade negotiations, with the STOXX 600 ending slightly lower following a four-day rally. Holiday-thinned trading conditions prevailed, while upcoming UK economic releases and ECB commentary are anticipated. ECB’s Peter Kazimir indicated that interest rate cuts are nearing completion, advising a data-dependent approach going forward. Meanwhile, UK consumer spending momentum waned in May, with retail sales growth slowing markedly to 1%, signalling softer household confidence and restrained discretionary expenditure.
U.S. Market Commentary
The S&P 500 modestly advanced, buoyed by gains in tech heavyweights Amazon and Alphabet amid renewed focus on U.S.-China trade talks aimed at easing protracted tensions. Amazon announced a significant $20 billion investment to expand its data centre footprint in Pennsylvania, driven by AI growth. This week’s calendar features crucial May inflation figures and jobless claims data, with the Federal Reserve widely expected to maintain its current policy stance. However, market vigilance remains over inflationary pressures heightened by ongoing tariff-related uncertainties.
Asia Market Commentary
Asia-Pacific equities rose as trade discussions between the U.S. and China extended into a second day, reflecting cautious optimism. Bank of Japan Governor Ueda reiterated the central bank’s readiness to raise interest rates if core inflation approaches the 2% target, highlighting ongoing efforts to stimulate sustainable price growth despite persistently low underlying inflation. Notably, Japanese investors executed their largest monthly German bond sell-off in over a decade, while Taiwan’s exports surged 38.6% year-on-year in May to a record $51.7 billion, propelled by AI demand and front-loaded orders ahead of impending U.S. tariffs.
Currency Market Commentary
The South African rand strengthened on optimism surrounding U.S.-China trade negotiations, while sterling gained against a softer dollar following robust U.S. employment data. The U.S. dollar remained stable amid cautious trading as investors weighed ongoing trade talks and awaited key inflation data. Efforts by the world’s two largest economies to de-escalate a multifaceted trade conflict—including tariffs and rare earth restrictions—continue, with discussions extending into a second day in London, reflecting heightened market sensitivity to geopolitical and economic developments.
Commodity Market Commentary
Gold prices retreated amid cautious investor sentiment awaiting further progress in U.S.-China trade talks, while oil climbed on hopes that a deal could alleviate trade tensions and bolster fuel demand. Iran signalled it would submit a counter-proposal in nuclear negotiations, with U.S.-Iran disputes persisting over uranium enrichment—a factor influencing sanctions and global oil supply dynamics. OPEC’s May output rose modestly but remained constrained by Iraq’s underproduction and conservative supply adjustments from Saudi Arabia and the UAE, maintaining tight market conditions.
Omnia Holdings Limited (OMN) +1.93%
Omnia reported resilient FY25 results, driven by strong performances in Mining, Agriculture RSA, and a turnaround in Agriculture International. Revenue grew 3% to R22.8bn, while HEPS rose 1% to 704 cents. Capital discipline supported a 400 cent ordinary dividend and a 275 cent special dividend. Despite a challenging macroeconomic backdrop, the Group maintained profitability, improved efficiency, and strengthened global positioning. ESG progress included lower CO₂ intensity, increased renewable energy use, and maintained Level 2 B-BBEE status. A strong balance sheet (R1.77bn net cash) and A+/A1 credit ratings affirm long-term strategic delivery.
Oceana Group Limited (OCE) 0.00%
Oceana posted mixed results for the period to March 2025, with solid performance from South African operations and segments like Lucky Star and wild-caught seafood. However, a sharp decline in global fish oil prices, following Peruvian supply recovery, saw HEPS drop 43.9% and operating profit fall 33.5% to R676m. Revenue increased 2.9% to R5.2bn, but gross margin contracted to 27.8% (March 2024: 34.1%). Net interest expense rose to R144m due to higher debt and US rate hedging costs. Operating cash flow dropped to R10m, while net debt increased to R3.5bn (net debt/EBITDA at 2.2x). Capex reached R183m for fleet and dry dock investments.
Alexander Forbes Group Holdings Limited (AFH) 0.00%
Alexforbes reported a strong FY25, with operating income up 13% to R4.4bn and operating profit before non-trading items rising 14% to R911m. HEPS grew 15% to 70.8 cents, with normalised HEPS up 23% to 69.1 cents. Cash from continuing operations increased 15% to R1.23bn. The capital position remained robust, with a R1.35bn regulatory surplus and 2.3x cover ratio. The final dividend rose 10% to 33 cents (annual total: 55 cents), alongside a 10 cent special dividend. Total closing assets increased 14% to R599bn.
Aveng Limited (AEG) -2.31%
Aveng expects a full-year loss for FY25, reversing FY24’s EPS of A$20.0c and HEPS of A$29.6c. The decline is attributed to ongoing challenges at the Kidston Pumped Hydro and Jurong Line projects, with the former further impacted by severe flooding. While McConnell Dowell NZ remains profitable, Australian operations will report an operating loss. Built Environs delivered earnings growth, and Moolmans secured a new 60-month Gamsberg contract. The Group has secured A$1.2bn in new work and is preferred bidder on another A$2bn. Strategic separation of McConnell Dowell and Moolmans is advancing, with full-year results due by 19 August.
PPC Limited (PPC) +1.20%
PPC delivered improved profitability and cash flow for FY25, underpinned by progress in its turnaround strategy. Revenue dipped 1.9% to R9.87bn, but EBITDA climbed 28% to R1.59bn, with margins expanding from 12.3% to 16.1%. Free cash flow before financing quadrupled to R1.05bn. HEPS more than doubled to 40 cents, supporting a 28% rise in the ordinary dividend to 17.6 cents. In SA and Botswana, revenue held steady despite a 2.3% volume drop, while EBITDA grew 31%. PPC Zimbabwe delivered record EBITDA of R849m (up 26%), a 27.2% margin, and declared US$13m in dividends (R234m due to PPC).
OpenAI (Not Listed)
OpenAI reported on Monday that its annualised revenue run rate has surged to $10 billion as of June, positioning it to meet its full-year target amid accelerating AI adoption. This marks a significant jump from the $5.5 billion run rate recorded in December 2024 and signals strong momentum toward its previously disclosed $12.7 billion revenue goal for 2025. The $10 billion figure excludes licensing income from Microsoft and one-off deals, underscoring organic growth from its AI offerings. Despite a $5 billion loss last year, OpenAI’s rapid scale outpaces many competitors in the expanding AI market. The company is also preparing to raise up to $40 billion in funding at a $300 billion valuation, supported by SoftBank. OpenAI’s ecosystem now includes multiple subscription products, serving 500 million weekly active users as of March.
Walt Disney Company (DIS) +1.55%
Disney has agreed to pay Comcast $438.7 million to acquire its remaining 33% stake in Hulu, finalising a protracted appraisal process that began after Disney’s 2023 announcement to buy out Comcast’s share. The initial $8.6 billion payment reflected Hulu’s minimum guaranteed valuation of $27.5 billion set in 2019. This move follows Disney’s majority acquisition of Hulu via its purchase of Fox’s entertainment assets, signalling Disney’s intent to consolidate full control over the streaming service. The appraisal process, initially anticipated to conclude in 2024, has now been completed.
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