Alibaba’s strong Q3 results boost growth outlook

Local Market Commentary

The Top 40 index gained 0.74% to close at 81,367.4 points, while the All Share index rose 0.6% to finish at 88,873.3 points. Tensions were evident at the G20 foreign ministers' meeting in South Africa on Thursday, with disagreements over the Ukraine conflict and trade issues, while the U.S. diplomat abstained from attending due to a dispute with the hosts. Next week, G20 finance ministers and central bank governors will convene in Cape Town. U.S. Treasury Secretary Scott Bessent confirmed he will skip the upcoming meeting.

European Market Commentary

European stocks closed at a one-week low on Thursday, with the pan-European STOXX 600 index falling 0.2%. The defence sector led the decline, dropping 2.8%, after earlier gains driven by expectations of increased government borrowing for defence spending. The European Commission proposed new measures to support sustainable investments and simplify sustainability reporting rules, aimed at enhancing the EU's competitiveness against the U.S. under Trump. Meanwhile, Germany's office market remains weak, with a potential recovery at risk due to economic challenges, as highlighted by Deutsche Pfandbriefbank. In the UK, British factories anticipate modest output growth in the next three months, despite challenges from higher taxes, energy costs, and a difficult export environment, with the Confederation of British Industry reporting a rise in manufacturers' output expectations for February.

U.S. Market Commentary

U.S. stocks experienced a broad selloff on Thursday, driven by tariff concerns and a negative forecast from Walmart, which dampened investor sentiment. The Dow led the declines, falling 1.01%, while the S&P 500 broke its two-day streak of record closes. Economic data, including jobless claims and factory activity, pointed to a stable U.S. economy, aligning with Federal Reserve comments, but some economists worry about potential labor disruptions due to recent firings by Elon Musk’s Department of Government Efficiency (DOGE). Financials led the losses, dropping 1.6%, while energy saw a 1.0% gain. Declining stocks outnumbered advancers across both the NYSE and Nasdaq, with 125 new highs and 72 new lows on the NYSE, and 54 new highs and 132 new lows on the Nasdaq. 

Asia Market Commentary

Hong Kong shares reached a three-year high this morning, leading regional gains as investors weighed Japan's inflation data against tariff concerns from U.S. President Donald Trump. Japan’s inflation rate in January rose to 4%, the highest since January 2023, with core inflation increasing to 3.2%, surpassing economists’ expectations. The "core-core" inflation rate, closely monitored by the Bank of Japan, edged up to 2.5%. This marks 34 consecutive months of headline inflation above the BOJ’s 2% target. Meanwhile, Alibaba’s shares surged in Hong Kong, driven by strong quarterly results and growth in its cloud intelligence and e-commerce segments.

Commodity Market Commentary

Gold prices held steady this morning, poised for their eighth consecutive weekly gain, as safe-haven inflows were driven by concerns over U.S. President Donald Trump's tariff threats. Meanwhile, Swiss gold exports in January saw a year-on-year increase, with shipments to the U.S. reaching their highest level in at least 13 years. Oil prices continued to rise, on track for a weekly gain, as falling U.S. gasoline and distillate inventories fuelled expectations of strong demand, while fears of supply disruptions in Russia provided further support. The Energy Information Administration reported that U.S. crude stockpiles increased, while gasoline and distillate inventories declined due to seasonal refinery maintenance.

Currency Market Commentary

South Africa's rand strengthened against a weaker dollar on Thursday as investors processed U.S. data and President Donald Trump's tariff proposals. The yen surged to a 2.5-month high following a jump in Japanese inflation, while the dollar was on track for its third consecutive weekly decline as traders viewed the start of Trump's second term as largely rhetorical on the tariff front. The Australian and New Zealand dollars reached their highest levels of the year, despite recent rate cuts in both countries and New Zealand's central bank signalling more cuts ahead. Australia's central bank indicated that while further rate decreases are possible, caution will be required moving forward.

Anglo American PLC (AGL) +3.04%

Anglo American delivered strong operational and cost performance in 2024, advancing portfolio simplification and strategic growth. The agreed divestment of its steelmaking coal and nickel businesses will generate up to $5.3 billion, enhancing balance sheet flexibility. Underlying EBITDA stood at $8.5 billion, maintaining a 30% margin despite weaker prices and a challenging diamond market. The company achieved $1.3 billion in cost savings ahead of schedule, with another $0.5 billion expected by 2025. Net debt remained stable at $10.6 billion (1.3x EBITDA), supported by strong cash flow. The total dividend for 2024 was $0.64 per share, in line with the 40% payout policy. The demerger of Anglo American Platinum is set for June 2025, while De Beers’ restructuring aims to boost cash flow and long-term value. With a well-sequenced pipeline of brownfield projects, Anglo American is positioning itself as a high-margin, cash-generative business focused on copper, premium iron ore, and crop nutrients.

Gold Fields Limited (GFI) +3.22%

Gold Fields reported a 77% increase in profit to $1,245 million ($1.39 per share) for FY 2024, driven by higher gold prices and strong operations. Gold production was 2.07 million ounces, with revenue per ounce rising to $2,418 from $1,942. Despite higher all-in sustaining costs (AISC) of $1,629/oz, adjusted free cash flow grew to $605 million. A final dividend of 700 SA cents per share brought the total FY 2024 payout to 1,000 SA cents (2023: 745 SA cents). Net debt increased to $2.09 billion, with a net debt-to-adjusted EBITDA ratio of 0.73x. The company remains focused on operational efficiency and sustainable shareholder returns.

Mondi PLC (MNP) -1.13%

Mondi delivered underlying EBITDA of €1,049 million in FY 2024, despite lower forestry fair value gains (€7 million vs. €128 million in 2023). The company advanced its growth strategy with five major capacity expansion projects, including an early start-up of its new Steti paper machine and the acquisition of the Hinton pulp mill in Canada. The planned acquisition of Schumacher’s Western Europe Packaging Assets remains on track for H1 2025. Shareholders received a €1.60 per share special dividend in February 2024, alongside an ordinary dividend of 70.0 euro cents per share, consistent with 2023.

Tiger Brands Limited (TBS) -1.15%

Tiger Brands posted 3% revenue growth for the four months to 31 January 2025, driven by volume growth and price adjustments amid a recovering consumer environment. The company refined its operating model, integrating Baby Nutrition into the Culinary BU, and progressed its portfolio optimisation, including the disposal of Baby Wellbeing and exit from Empresas Carozzi S.A. in Chile. Efficiency initiatives boosted gross margins and operating profit, while the listeriosis class action remains ongoing, with interim relief payments agreed despite no liability determination. Management remains optimistic, focusing on portfolio reshaping, channel expansion, cost leadership, and brand rejuvenation. H1 2025 earnings are expected to align with guidance, ahead of results on 28 May 2025.

Barloworld Limited (BAW) -0.87%

Barloworld delivered 1% revenue growth for the four months to 31 January 2025, with Mongolia’s strong 80% expansion offsetting weaker southern African mining activity. Industrial Equipment revenue declined by 4.7% in southern Africa due to lower aftermarket activity, while Vostochnaya Technica’s revenue fell 23.3% due to sanctions but remains self-sufficient. Ingrain grew revenue by 1.6%, with strength in alcoholic beverages and paper offset by weaker confectionery and prepared foods demand. Capital allocation remains a priority, with R5.20 per share paid in 2024 dividends. A voluntary pre-close update for the six months ending 31 March 2025 will follow.

Alibaba Group Holding Limited (9988) -1.74%

Alibaba shares opened 10% higher in Hong Kong on Friday, reaching their highest level in over three years, following a strong third-quarter performance. The company reported revenue of 280.15 billion yuan ($38.58 billion) for the three months ending December 31, slightly exceeding analysts' expectations of 279.34 billion yuan. Alibaba’s continued investment strategy focuses on expanding its e-commerce and artificial intelligence (AI) businesses, which is expected to drive future growth. The company’s solid results helped boost investor confidence in its long-term potential.

Booking Holdings (BKNG) -1.81%

Booking Holdings exceeded analysts' expectations in its fourth-quarter earnings report, driven by strong demand for international travel. The company posted an adjusted profit of $41.55 per share, significantly outperforming the average estimate of $36.03 per share. Revenue increased by 14% year-on-year to $5.47 billion, with total gross bookings rising 17% to $37.2 billion. The company saw notable growth in its European and Asia-Pacific markets, benefitting from increased travel in Southeast Asia and a rebound in long-haul trips from affluent American tourists.

Walmart Inc. (WMT) -6.53%

Walmart projected lower-than-expected sales and profit growth for the current fiscal year, citing caution amid geopolitical uncertainties. The retailer forecasted adjusted earnings per share to range between $2.50 and $2.60, below analysts’ expectations of $2.76. It also projected annual sales growth between 3% and 4%, slightly below the anticipated 4%. Despite these cautious forecasts, Walmart saw a 2.8% rise in transactions at its U.S. stores and a notable 20% increase in U.S. e-commerce sales. The retailer also raised its dividend by 13%, marking the largest increase in over a decade, signalling continued confidence in its cash flow.

Yandex LLC (Not Listed)

Russian internet company Yandex announced its annual revenue exceeded 1 trillion roubles ($11.22 billion) for the first time, a 37% increase year-on-year. This marks a significant achievement for the company, which underwent a major restructuring, including the sale of its Russia-based assets in a $5.4 billion deal. Despite the challenges of operating amid geopolitical tensions, Yandex remains optimistic, projecting at least 30% revenue growth in 2025. The company’s Moscow-listed shares rose 1.3% on the news, reflecting confidence in its future growth prospects following the restructuring.

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