Netflix’s ad-supported tier hits 94 million users amid growth and US trade risks

Local Market Commentary

The JSE Top 40 and All Share indices closed lower on Wednesday, down 0.28% and 0.18% respectively, finishing at 84,915.5 and 92,473.9 points as investors weighed domestic political and fiscal developments. President Cyril Ramaphosa is scheduled to meet U.S. President Donald Trump in Washington on 21 May to discuss bilateral and global matters, while Finance Minister Enoch Godongwana reiterated his opposition to a wealth tax ahead of a third parliamentary vote on Budget 2025, citing limited yield from wealth-based taxes, which generated between R19.4bn and R22.6bn annually over the past four years. Meanwhile, wage arbitration talks between Transnet and UNTU have entered a decisive phase, with the risk of a strike by over 23,000 workers looming should negotiations at the CCMA fail.

European Market Commentary

European shares slipped 0.2% on Wednesday, ending a four-day rally sparked by progress in U.S.-UK and U.S.-China trade negotiations, as mixed corporate earnings and cautious sentiment resurfaced. The STOXX 600 index's pullback comes ahead of key euro zone economic data releases later this week. Meanwhile, major foreign business chambers in Romania expressed concerns over the rapidly deteriorating investment climate amid political instability following the rise of hard-right candidate George Simion and the collapse of the pro-Western coalition government, raising questions about the country's fiscal outlook. Despite this, Goldman Sachs and Barclays upgraded their 12-month STOXX 600 targets to 570 and 540 points respectively, reflecting renewed optimism from the recent trade truce easing fears of a global recession.

U.S. Market Commentary

The S&P 500 closed slightly higher on Wednesday after a volatile session, as investors awaited key economic data following a strong start to the week driven by soft inflation figures and a temporary U.S.-China tariff truce. Market attention was focused on potential trade developments amid President Donald Trump’s Gulf tour, during which Saudi Arabia pledged $600 billion in commitments. U.S. tech stocks gained after the administration announced AI-related deals in the Middle East. Despite recent inflation data suggesting progress towards the Fed’s 2% target, Federal Reserve officials expressed uncertainty over the outlook, highlighting tariff impacts. All eyes are now on Fed Chair Jerome Powell’s upcoming remarks for guidance on future monetary policy easing.

Asia Market Commentary

Asia-Pacific markets mostly declined on Thursday following gains in the prior session amid easing U.S.-China trade tensions. Australian employment surged by 89,000 in April, significantly exceeding forecasts, while the unemployment rate held steady at 4.1%. Meanwhile, China’s central bank cut the reserve requirement ratio by 50 basis points, releasing approximately 1 trillion yuan ($138.5 billion) in liquidity, and introduced further monetary easing measures, including interest rate cuts, to support economic growth amid ongoing trade uncertainties.

Currency Market Commentary

South Africa’s rand recovered some losses on Wednesday following rolling power cuts by the national utility, while sterling fell against the euro after a seven-day winning streak but strengthened against a softer dollar amid fading early-week optimism over eased U.S.-China trade tensions. The U.S. dollar weakened on Thursday amid ongoing trade truce developments and speculation that Washington may favour a weaker dollar in trade negotiations, supporting gains in the South Korean won, which experienced volatility as investors digested reports of recent U.S.-South Korea talks on the dollar-won exchange rate.

Commodity Market Commentary

Gold prices fell to a one-month low on Thursday ahead of key U.S. economic data expected to influence Federal Reserve policy, with easing U.S.-China trade tensions further reducing bullion’s appeal. Oil prices dropped nearly $1 amid prospects of a U.S.-Iran nuclear deal, supported by Iran’s willingness to negotiate sanctions relief and Saudi Arabia’s backing of the talks. However, U.S. sanctions targeting Iran’s ballistic missile components and oil network persisted. Despite OPEC+ continuing supply increases, OPEC lowered its forecast for non-OPEC supply growth this year. U.S. crude inventories unexpectedly rose by 3.5 million barrels last week, well above expectations, intensifying concerns over oversupply alongside a similar build reported by industry data.

Assura plc (AHR) 0.00%

Assura plc, the UK’s leading healthcare REIT, reported solid performance for the year ended 31 March 2025, underpinned by proactive portfolio recycling and capital partnerships. Activity included the £500 million acquisition of 14 private hospitals, completion of five developments worth £61.5 million, and establishment of a £250 million joint venture with USS, seeded with £172 million of assets. The Company disposed of 17 non-core properties for £28 million in line with book value, contributing to a portfolio now comprising 603 properties, generating £177.9 million in annualised rent and a WAULT of 12.7 years. Rent reviews delivered an average uplift of 3.2%, including 6.1% like-for-like growth. The balance sheet remains robust, with net assets of c.£1.64 billion (EPRA NTA of 50.4p per share), a 46.9% LTV, and £174 million in undrawn debt facilities.

Dipula Properties Limited (DIB) +2.09%

Dipula declared a gross interim dividend of 25.60194 cents per ordinary share for the period 1 September 2024 to 28 February 2025. The dividend will be paid on 9 June 2025 to shareholders on the register as at 6 June 2025, with the last day to trade cum-dividend on 3 June and shares trading ex-dividend from 4 June. No dematerialisation or rematerialisation will be permitted between 4 and 6 June. Tax details will follow in a separate announcement, with full interim results available on the company’s website and JSE platform.

enX Group Limited (ENX) 0.00%

enX posted a 10% year-on-year revenue decline to R1.134 billion for the six months to 28 February 2025, largely due to reduced demand in its Power segment following easing of load-shedding. HEPS dropped 29% to 22 cents, and PBT declined 19% to R64 million. While the Chemicals division maintained margin resilience, overall group operating profit fell 41% to R41 million. NAV per share declined to R8.65 (Aug 2024: R9.06). The balance sheet was bolstered by R23 million in net finance income and a special distribution of R1.55 per share (R283 million), declared post-period.

Eastern Platinum Limited (EPS) 0.00%

Eastern Platinum reported a 5.7% year-on-year decline in Q1 2025 revenue to $14.8 million, reflecting softer chrome concentrate sales. The Company recorded a mine operating loss of $4.7 million versus a $5.3 million profit in Q1 2024, with gross margin deteriorating to -31.6% due to elevated costs associated with restarting underground operations at Crocodile River Mine. The operating loss widened to $8.1 million, and net loss to shareholders rose to $6.9 million (loss of $0.03 per share). Eastplats closed the quarter with a $47.4 million working capital deficit and $4.7 million in cash. Focus remains on ramping up underground volumes to support future production output.

Tencent Music Entertainment Group (1698) +12.84%

Tencent Music Entertainment exceeded first-quarter revenue estimates with a 8.7% increase to 7.36 billion yuan ($1.08 billion), supported by a 16.6% rise in music subscription revenue to 4.22 billion yuan and an 8.3% increase in paying users to 122.9 million. CEO Ross Liang highlighted long-form audio content, including podcasts and audiobooks, as a key driver behind growth in its Super VIP (SVIP) program, which offers bundled access to premium audio, karaoke, and exclusive events. Adjusted earnings per ADS reached 1.37 yuan, surpassing estimates of 1.33 yuan. However, revenue from its social entertainment segment, covering karaoke and live concert platforms, declined 11.9% to 1.55 billion yuan.

Netflix Inc. (NFLX) +1.10%

Netflix reported that its advertising-supported subscription tier now has 94 million users, up from 70 million in November, reflecting strong demand for its lower-priced offering amid ongoing global economic uncertainty. With over 300 million total subscribers worldwide, Netflix sees steady spending across all streaming plans and has not observed significant consumer cutbacks despite shifting U.S. trade policies. The ad-supported tier accounted for 55% of new sign-ups in available markets, aided by expanded language options to attract a broader global audience. However, potential U.S. tariffs on foreign-made content, such as South Korean and Spanish productions that underpin much of Netflix’s popular catalogue, pose a risk to the company’s international content strategy.

Boeing Company (BA) +0.64%

Boeing secured its largest widebody aircraft order to date, with Qatar Airways placing firm orders for 160 jets—130 787 Dreamliners and 30 777X models—plus options for an additional 50 aircraft, valued at $96 billion, announced during President Donald Trump’s visit to Qatar. This landmark deal also includes 400 GE Aerospace (GE.N) engines, marking the largest engine order in GE’s history and underscoring GE’s critical role as the sole engine supplier for the 777X and preferred provider for the 787 in this deal, with Qatar opting for GE’s GEnx engines over Rolls-Royce for the latter. The transaction provides a significant boost to Boeing amid delays to the 777X program, which is scheduled for delivery starting in 2026, and strengthens its position against Airbus, whose A350 jets have faced maintenance challenges in hot climates like the Gulf region. Boeing shares rose 0.6% and GE Aerospace shares gained 0.7% following the announcement. The order was signed in a ceremony attended by President Trump, Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani, and Boeing and Qatar Airways executives, highlighting its geopolitical and commercial significance during Trump’s Gulf tour.

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