Netflix jumps as strong Q1 and ad-tier momentum reinforce 2025 outlook

Local Market Commentary

The JSE resumes trade today after the long weekend closure, with attention on South Africa’s domestic bond market, where foreign investor interest has surged. Non-resident holdings of local-currency bonds rose to 25% by March — the highest level since October. Last week Thursday, the JSE Top 40 and the broader All Share Index closed down 0.33% and 0.23%, ending at 82,262.1 and 89,486.8 points respectively. Between December and March, the country attracted $2.8 billion in fixed income inflows, bucking broader EM trends. This optimism comes despite economic and governance headwinds, including electricity shortages and coalition instability. Finance Minister Enoch Godongwana has proposed a VAT hike to 15.5% effective 1 May to address fiscal strains, but the Democratic Alliance has legally challenged the increase, raising stakes in South Africa’s fragile political landscape. All local market prices and changes will reflect the last available trading session.

European Market Commentary

European markets remained closed for a four-day weekend due to the observance of Good Friday and Easter Monday, with trading resuming today.

U.S. Market Commentary

U.S. markets plunged on Monday, driven by President Donald Trump’s renewed criticism of Federal Reserve Chair Jerome Powell, heightening fears over the central bank’s independence and compounding concerns already caused by erratic trade policies. The S&P 500 ended 16% below its February 19 peak, edging closer to bear market territory, while the Nasdaq, weighed down by significant losses among the "Magnificent Seven" tech giants, led the declines. All three major indices dropped more than 2%. As earnings season ramps up, 68% of the 59 S&P 500 companies that have reported thus far surpassed analyst expectations, according to LSEG data.

Asia Market Commentary

Asia-Pacific markets were subdued this morning, following a sell-off on Wall Street triggered by U.S. President Donald Trump intensifying his pressure on Federal Reserve Chairman Jerome Powell. Moody's Analytics anticipates the Bank of Japan will pause rate hikes at its May meeting, citing market uncertainty and softer inflation. Japan’s inflation reached 3.6% year-on-year in March, exceeding the Bank of Japan’s 2% target for the third consecutive year. Despite this, the central bank may resume tightening due to persistent inflation and wage improvements, while the yen remains weaker than economic fundamentals suggest. In a separate development, Nomura announced its acquisition of Macquarie's North American and European public investments business for $1.8 billion.

Commodity Market Commentary

Gold prices extended their record rally this morning, driven by U.S. President Donald Trump’s ongoing criticism of Federal Reserve Chair Jerome Powell, which stoked risk aversion and pushed investors towards the safe-haven metal. Meanwhile, oil prices rebounded early on Tuesday, as investors covered short positions following the previous day’s losses, though concerns over economic headwinds from tariffs and U.S. monetary policy lingered, threatening to weaken fuel demand. Russia's economy ministry has revised down its 2025 Brent crude price forecast by nearly 17%, now projecting an average price of $68 per barrel, down from its previous estimate of $81.7 per barrel made in September, according to documents obtained by Reuters.

Currency Market Commentary

The U.S. dollar remained near its lowest level in three years this morning, weighed down by President Donald Trump's ongoing criticism of Federal Reserve Chairman Jerome Powell, which continued to dampen investor confidence in the U.S. economy. The currency hovered close to a decade-low against the Swiss franc and a 3-1/2-year low against the euro. White House economic adviser Kevin Hassett revealed that Trump’s team was still considering the possibility of firing Powell, a day after Trump expressed his desire for Powell’s termination. This latest move follows Powell’s comments last week, where he indicated that the Fed could afford to be patient with policy decisions and that rate cuts were premature until it becomes clearer whether U.S. tariffs could fuel persistent inflation.

Sasol Limited (SOL) +1.32%

Sasol continues to endure margin pressure due to persistent macroeconomic and geopolitical challenges; however, self-help initiatives have supported free cash flow generation. In Southern Africa, production volumes were impacted by operational issues at Secunda Operations and Natref, driven by coal quality concerns and unplanned outages—necessitating temporary reliance on higher-quality purchased coal. Internationally, Q3 FY25 brought pricing recovery in Chemicals, though volumes declined following outages in the US. Sasol exited its US Phenolics business to streamline its portfolio and remains focused on optimising its asset base. Regulatory improvements, including renewed emissions licences and a more favourable carbon tax regime, have improved the outlook for domestic investment. The company is assessing recent US tariff developments and engaging stakeholders to mitigate risks. FY25 financials remain within guidance, underpinned by tight cost discipline, healthy liquidity, and active hedging, though some volume forecasts have been trimmed due to supply constraints and evolving global trade dynamics.

South32 Limited (S32) -0.74%

South32 reported a resilient March 2025 quarter, lifting net cash by US$299M to US$252M, supported by solid operations, a US$100M one-off receipt from Worsley Alumina, and improved working capital management. Aluminium and copper production increased by 6% and 18% year to date, respectively, as Mozal Aluminium neared nameplate capacity and Sierra Gorda benefited from improved copper grades. Strategic project advancement continued across Worsley Mine Development and the Hermosa shaft, while exports from Australia Manganese are expected to resume by June. Despite a 10% reduction in FY25 guidance for Cannington, overall output and capex forecasts remain intact. Capital returns included US$42M in share buy-backs (with US$158M capacity remaining), an US$11M divestment in Elemental Altus, and a US$154M dividend paid post-quarter. The company’s ongoing structural simplification is anticipated to yield US$30M in annualised savings from FY26.

Zeder Investments Limited (ZED) +1.43%

Zeder has issued a trading statement advising that its net asset value per share (NAVPS) as at 28 February 2025 is expected to range between R1.73 and R1.82—representing a decline of 26.6% to 30.2% from R2.48 reported the previous year. The reduction stems primarily from 61 cents per share in special dividends paid following asset disposals, alongside negative valuation adjustments to remaining unlisted investments. This decline reflects the strategic emphasis on returning capital to shareholders and rationalising the investment portfolio.

Netflix Inc. (NFLX) +1.51%

Netflix shares climbed after the company reaffirmed its 2025 revenue guidance of $43.5–$44.5 billion, reinforcing investor confidence despite a tariff-driven macroeconomic environment. Co-CEO Greg Peters highlighted the platform’s historical resilience during downturns and its robust first-quarter earnings performance, which exceeded analyst expectations. Notably, the ad-supported tier is gaining traction, contributing 55% of new sign-ups in applicable markets, underscoring the success of its pricing diversification strategy.

W R Berkley Corporation (WRB) -2.14%

W R Berkley reported a 5.6% decline in first-quarter profit to $417.6 million (or $1.04 per share), marking its first year-on-year earnings drop in nearly two years as catastrophe losses surged to $111.1 million, up from $30.5 million. The insurer's underwriting was impacted by one of California’s costliest disasters, amid rising climate-related risks. However, resilience was shown through a 9.9% rise in net written premiums to $3.13 billion and a 12.6% increase in net investment income to $360.3 million, aided by a $27 million gain from other investment holdings. The combined ratio rose to 90.9% from 88.8% but remained well below 100%, signalling continued underwriting profitability.

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