UnitedHealth Shares Slide as Leadership Changes and Forecast Paused Amid Industry Pressures

Local Market Commentary

The Top 40 rose 0.55% to 85,156.8 and the All Share gained 0.51% to 92,638.8, despite a concerning rise in South Africa’s official unemployment rate to 32.9% in Q1 (from 31.9%) and a broader measure hitting 43.1%, reflecting deepening structural challenges. Meanwhile, diplomatic efforts are underway to repair strained US-South Africa relations, with a Ramaphosa-Trump meeting reportedly in the works. In corporate news, Exxaro Resources announced an R11.67 billion deal to acquire South African manganese assets from Ntsimbintle Holdings and OM Holdings, aligning with its strategic shift towards green transition minerals.

European Market Commentary

European equities edged higher on Tuesday, with the STOXX 600 up 0.1% for a fourth straight session, supported by easing US inflation and improving earnings sentiment, though momentum showed signs of fatigue. Despite sharp profit declines at Munich Re and Hannover Re due to €1.7 billion in wildfire-related claims, the broader earnings outlook brightened: Q1 EPS growth expectations for European firms rose to 1.9% from 0.4% last week, with 59.6% of reporting STOXX 600 firms beating estimates, and revenue forecasts also revised upwards to 2.3% growth, marking a notable turnaround from last year's declines.

U.S. Market Commentary

U.S. equities extended gains on Tuesday, with the S&P 500 and Nasdaq rising for a second consecutive session as April CPI data came in softer than expected—up 0.2% month-on-month versus forecasts of 0.3%—boosting investor sentiment already lifted by a U.S.-China trade truce. The S&P 500 turned positive year-to-date for the first time since February, while easing inflation, resilient earnings, a 90-day pause on tariffs for non-China countries, and a limited U.S.-UK trade pact contributed to the renewed optimism.

Asia Market Commentary

Asia-Pacific markets traded mixed on Wednesday, with sentiment buoyed by easing U.S.-China trade tensions and Nvidia’s AI-driven rally, while South Korea’s labour market showed continued strength—unemployment fell to 2.9% in April, its lowest since November 2024, alongside rising labour force participation and economic activity. Investors are watching regional chipmakers closely after Nvidia announced plans to supply over 18,000 AI chips to Saudi-backed startup Humain, reinforcing AI-related momentum across tech sectors.

Commodity Market Commentary

Oil prices eased on Wednesday, weighed down by a 4.3 million barrel rise in U.S. crude inventories, although optimism from the U.S.-China tariff truce helped keep prices near two-week highs. Gold prices gained on Tuesday, supported by bargain-hunting and softer U.S. inflation data. Meanwhile, the cobalt market is set to shift from surplus to deficit in the early 2030s, driven by rising demand for electric vehicle batteries. The short-term outlook for cobalt depends on the Democratic Republic of Congo's (DRC) actions following its four-month export ban, which began in February.

Currency Market Commentary

The South African rand weakened on Tuesday after the country’s unemployment rate rose in Q1. The British pound recovered some ground against the dollar after a dip, following the announcement of a temporary U.S.-China tariff reduction. The U.S. dollar stabilised on Wednesday after its largest decline in over three weeks, supported by softer-than-expected U.S. inflation data, which reinforced expectations for potential Federal Reserve easing amid cooling global trade tensions. The U.S. CPI rose 0.2% in April, below the 0.3% forecast.

Santam Limited (SNT) +1.30%

Santam posted a strong first-quarter 2025 performance, exceeding all long-term financial targets despite challenging macroeconomic and geopolitical conditions. Gross written premium grew by double digits, with the conventional insurance business up 11%, led by MiWay, Santam Re, and business insurance lines. Underwriting margins exceeded the 5–10% target range, aided by prior corrective actions and favourable claims experience, while annualised return on capital surpassed 30%. The Alternative Risk Transfer segment also performed well, although shareholder investment returns were impacted by currency translation losses. Santam remains well-capitalised and focused on underwriting discipline and growth, supported by the newly finalised MultiChoice partnership.

Bytes Technology Group plc (BYI) -3.50%

Bytes Technology Group reported a record financial year, with Gross Invoiced Income (GII) surpassing £2 billion for the first time—up 15.2% year-on-year, primarily driven by strong software demand. Gross profit rose 12.0%, supported by 18.2% growth in the public sector and 8.9% in the corporate segment, along with double-digit gains in software and services. Operating profit increased by 17.1%, with the margin on gross profit rising to 40.7%. A final dividend of 6.9p brought the full-year ordinary dividend to 10.0p (up 15.0%), complemented by a special dividend of 10.0p. Operationally, the company maintained a 109% renewal rate with 97% of gross profit from existing clients, expanded its workforce by 17.8%, and continued its UK footprint expansion. Vendor recognition and enhanced Microsoft Azure credentials also underscored Bytes' market leadership and innovation focus.

Sony Group Corporation (6758) +1.73%

Sony expects a modest 0.3% increase in operating profit to 1.28 trillion yen ($8.7 billion) for the financial year ending March, despite a 100 billion yen impact from U.S.-China trade tensions. The company, which has evolved from household electronics to a global entertainment leader, plans a partial spin-off of its financial unit in October, retaining less than a 20% stake. Operating profit for the year ending March rose 16% to 1.4 trillion yen, surpassing analyst forecasts. Additionally, Sony expects a 16% profit increase in its gaming division, driven by higher sales of first-party PlayStation 5 games, following recent price hikes in Europe and the UK due to inflation and exchange rate fluctuations.

UnitedHealth Group Incorporated (UNH) -17.79%

UnitedHealth Group saw its shares drop nearly 18% to a four-year low after CEO Andrew Witty resigned on Tuesday, citing personal reasons. Chairman Stephen Hemsley, who previously served as CEO until 2017, will take over the role again. The company also suspended its annual forecast due to rising medical costs, following a challenging period that included its first earnings miss since the 2008 financial crisis. UnitedHealth faced multiple setbacks under Witty’s leadership, including a cyberattack affecting 190 million people, an investigation into Medicare billing practices, and unexpected surges in medical costs. Additionally, the company was thrust into the spotlight in December when Brian Thompson, CEO of its insurance unit, was tragically murdered in New York.

Foxconn (2317) +3.27%

Foxconn, the world's largest contract electronics maker, is set to report a 72% increase in first-quarter profit, driven by strong demand for AI servers. Net profit for January-March is expected to reach T$37.8 billion ($1.25 billion), up from T$22.01 billion a year earlier. The company’s first-quarter revenue surged 24.2%, reaching a record for the quarter, largely due to AI server sales. Despite this positive performance, global trade uncertainty, particularly Foxconn’s significant manufacturing presence in China, may pose challenges, although the U.S. and China agreed to temporarily lower tariffs. Foxconn is also expanding its manufacturing footprint in Mexico to produce AI servers for Nvidia.

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