BHP Group beats on profit as copper surge drives earnings shift and dividend upside

South African Market Summary

The JSE All Share index rose 0.34% to 120,988.65 points, while the Top 40 gained 0.28% to 112,878.21, reflecting modest upward momentum. Attention turns to Q4 employment data, with expectations for a slight improvement from the 31.9% unemployment rate. Corporate developments included African Rainbow Minerals’ leadership transition, as Patrice Motsepe shifts to non-executive chairman. On the diplomatic front, the arrival of the new US ambassador signals potential progress in bilateral relations, which may support longer-term investor sentiment and cross-border engagement.

European Market Summary

European equities edged higher, with the STOXX 600 rising 0.13% to 618.52 points, supported by strength in financials and a 1% gain in Spain’s IBEX. Markets continue to navigate AI-related disruption concerns, reflected in a sharp decline in Dassault Systèmes. Earnings season has been relatively supportive, with 60% of companies beating expectations, while the anticipated earnings contraction has narrowed. Macro data showed eurozone industrial production rising 1.2% year-on-year, suggesting gradual stabilisation as investors assess the impact of fiscal stimulus on regional growth dynamics.

US Market Summary

US markets were closed for the Presidents’ Day holiday, resulting in subdued global trading conditions and limited price discovery. The absence of US equity and bond market activity contributed to lower liquidity across global markets, with investors largely maintaining positioning ahead of a data-heavy week. Focus now shifts to upcoming macroeconomic releases, including Federal Reserve minutes and GDP data, which are expected to provide further clarity on the interest rate outlook and broader economic momentum.

Asian Market Summary

Asian markets traded cautiously in thin conditions, with multiple major exchanges closed for Lunar New Year holidays alongside the US Presidents’ Day closure. Regional sentiment remains supported by improving manufacturing activity and export demand, while foreign inflows into Asian bonds extended for a fourth consecutive month, albeit at a slower pace. However, flows were uneven, with Indonesia and India experiencing outflows amid policy uncertainty and index inclusion delays. Oil prices edged higher ahead of US-Iran nuclear talks, adding a geopolitical dimension to market direction.

Currency Market Summary

The rand weakened modestly as investors awaited domestic employment data for further economic signals. The US dollar remained firm ahead of key Federal Reserve communications, while the yen recovered slightly following prior weakness linked to disappointing economic data. The Australian dollar softened after central bank minutes, reflecting cautious policy expectations. Currency markets remained subdued amid reduced liquidity due to global holidays, with attention firmly on upcoming US macroeconomic releases expected to influence rate expectations and broader currency direction.

Commodity Market Summary

Commodity markets reflected a mix of strategic investment and geopolitical tension. Vitol backed a $3 billion LNG and gas power project in Durban, aligning with South Africa’s energy transition ambitions. Oil prices held steady as markets assessed potential supply risks linked to Iran’s naval activity ahead of US negotiations. Meanwhile, gold declined 1% amid thin trading conditions, reflecting reduced safe-haven demand. Broader commodity trends remain sensitive to geopolitical developments and structural energy shifts, particularly in emerging markets pursuing diversification away from coal dependence.

AECI Limited (AFE) +8.19%

AECI expects a materially improved FY2025 performance, with EPS turning positive to 319–353 cents from a prior loss and HEPS rising 43–58% to 1,022–1,131 cents, reflecting stronger underlying profitability. EBITDA is anticipated to increase by over 10% despite lower revenue, supported by improved Mining performance and margin discipline. Net finance costs are expected to decline by ~34% amid reduced debt, while impairments of ~R820 million weigh on EPS. Strategic disposals of ~R2.3 billion have strengthened the balance sheet, reducing net debt to ~R460 million and gearing to ~5%, enhancing financial resilience.

Telkom SA SOC Limited (TKG) +6.09%

Telkom reported continued data-led growth in Q3 FY2025, with group data revenue rising 9.6% to R6.86 billion, contributing 60% of total revenue, supported by 12.9% mobile data and 8.9% fibre-related growth. Mobile service revenue increased 7.2%, underpinned by strong prepaid momentum, while Openserve delivered 2.2% growth, marking a third consecutive quarterly expansion. EBITDA rose 8.4% to R3.24 billion, with margins improving to 29.1% on cost optimisation. Mobile subscribers surpassed 25 million, with data users up 29.3%, while fibre connectivity remained robust at 52.4%.

Stefanutti Stocks Holdings Limited (SSK) +3.73%

Stefanutti Stocks reported a strengthened operational outlook, with its order book increasing to R15.3 billion from R13.2 billion, providing multi-year revenue visibility across FY2026–FY2028. The pipeline remains robust, with short-term potential awards of R12.5 billion and identified prospects of R144 billion, supporting medium-term growth expectations. Balance sheet pressures continue to ease, with the Standard Bank facility reduced to R250 million from R850 million, lowering anticipated interest costs by approximately 70% per annum into FY2027, reinforcing improving financial stability and funding flexibility.

BHP Group Limited (BHP) -1.51%

BHP delivered a strong first-half performance, with underlying profit rising 22% to $6.20 billion, ahead of expectations, driven by surging copper prices linked to AI-driven power demand and energy transition trends. Notably, copper overtook iron ore as the largest earnings contributor, accounting for 51% of operating profit. The group declared an interim dividend of 73 cents per share, exceeding forecasts, supporting a positive market reaction. While iron ore remains operationally strong, cost pressures and softer price expectations persist, with BHP prioritising organic copper growth and disciplined capital allocation over large-scale acquisitions.

Warner Bros. Discovery Inc. (WBD) -0.43%

Warner Bros. Discovery is reassessing strategic options after receiving an amended takeover proposal from Paramount Skydance, prompting board-level discussions on whether a superior offer to its existing Netflix agreement could emerge. Paramount’s revised bid includes a 25-cent quarterly “ticking fee” from 2027 and coverage of a $2.8 billion break fee, maintaining its $30-per-share valuation. The situation highlights intensifying competition for premium content assets, with activist investor pressure adding complexity, as stakeholders weigh value maximisation against execution certainty in a potential large-scale media consolidation.

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