Rolls-Royce Holdings eyes up to £1.5bn buyback on strong cash flow and upgraded profit outlook

South African Market Summary

The JSE All Share Index gained 0.97% to close at 123,022.03, with the Top 40 rising 1.04% to 114,829.51, reflecting broad-based strength across the local market. Corporate developments remained in focus, with the Industrial Development Corporation signalling uncertainty over further support for Tongaat Hulett as business rescue proceedings move towards potential liquidation. In the financial sector, Standard Chartered has initiated a sale of its Botswana operations, attracting early interest from major domestic banks including Nedbank, Absa, Standard Bank and FirstRand, highlighting ongoing consolidation dynamics within the regional banking landscape.

European Market Summary

The STOXX Europe 600 advanced 0.8% to a record close of 630.56, capping its strongest weekly performance since early January, as investor sentiment improved following a U.S. Supreme Court ruling striking down broad tariff measures. Gains were supported by a more constructive corporate earnings outlook and easing concerns around near-term disruption from artificial intelligence. Macro data further underpinned the move, with eurozone business activity accelerating ahead of expectations and manufacturing returning to expansion for the first time since October. ECB President Christine Lagarde also reassured markets of leadership continuity.

US Market Summary

U.S. equities closed higher, led by mega-cap technology stocks, after the Supreme Court ruled 6–3 against former President Donald Trump’s global tariffs, easing trade-related uncertainty. Alphabet (+3.7%), Amazon (+2.6%) and Apple (+1.5%) drove gains, supporting broader index performance. Macro data presented a mixed backdrop, with Q4 growth slowing more than expected while December inflation showed signs of firming. Market expectations remain finely balanced, with futures pricing indicating just over a 50% probability of a Federal Reserve rate cut by June, reflecting ongoing uncertainty around the policy trajectory.

Asian Market Summary

Asia-Pacific markets opened the week higher despite renewed tariff uncertainty, after President Donald Trump signalled an increase in global tariffs to 15%. China responded cautiously, indicating it is assessing the U.S. Supreme Court ruling while urging the removal of unilateral trade measures. Corporate developments weighed selectively, with Ampol shares falling to a six-month low as refining margins declined sharply, highlighting pressure from weaker product cracks and rising inventories. Regionally, macro signals were mixed, with Hong Kong’s unemployment rate edging higher to 3.9%, pointing to modest labour market softening.

Currency Market Summary

The rand strengthened modestly as the U.S. dollar softened, despite a higher-than-expected 0.4% rise in December PCE inflation, which marginally exceeded forecasts. Currency markets remained sensitive to geopolitical developments, particularly escalating tensions between the U.S. and Iran. Into the new week, the dollar eased further following the U.S. Supreme Court’s decision to strike down broad tariff measures, supporting global growth sentiment. However, gains were contained as ongoing Middle East uncertainty and policy ambiguity continued to temper risk appetite across FX markets.

Commodity Market Summary

Gold advanced to a three-week high as tariff-related uncertainty and a weaker U.S. dollar drove safe-haven demand, while oil prices declined approximately 1% amid easing geopolitical risk ahead of renewed U.S.–Iran nuclear talks. Market sentiment remains cautious, with tariff escalation concerns weighing on the global growth outlook and fuel demand expectations. Goldman Sachs maintains a broadly oversupplied oil market outlook for 2026, lifting near-term price forecasts on tighter OECD inventories, but flagging downside risks from potential sanctions relief for Iran and Russia, which could unlock additional supply and pressure prices longer term.

Anglo American Plc (AGL) +2.20%

Anglo American reported a transformational 2025 marked by portfolio optimisation and strategic progress, including its proposed merger with Teck. Underlying EBITDA rose modestly to $6.4 billion, with strong margins in Copper (49%) and Premium Iron Ore (43%), supported by disciplined cost control and operational delivery. The group achieved $1.8 billion in cost savings and 107% cash conversion, while net debt reduced to $8.6 billion following asset disposals. However, results were impacted by a $2.3 billion De Beers impairment, resulting in a $3.7 billion loss, with headline EPS declining to $0.39.

Sibanye-Stillwater Limited (SSW) +1.84%

Sibanye-Stillwater reported a strong recovery for FY2025, with revenue increasing 14% to R129.7 billion and adjusted EBITDA rising 189% to R37.8 billion, supported by favourable precious metals pricing and solid operational delivery. HEPS surged 281% to 244 cents, while normalised earnings improved materially in H2. Balance sheet strength improved, with net debt to EBITDA at 0.59x. A dividend of R3.7 billion (R1.31 per share) was declared. Strategic progress includes advancement of the Keliber lithium project and continued leadership in renewable energy, supporting long-term cost savings and sustainability objectives.

Dis-Chem Pharmacies Limited (DCP) +3.91%

Dis-Chem reported solid trading momentum for the 24 weeks to 16 February 2026, with group revenue increasing 10.1%, supported by retail growth of 9.5% and wholesale expansion of 15.7%. Performance was underpinned by the successful rollout of its Better Rewards programme, driving higher customer engagement, increased shopping frequency and market share gains, alongside strong pharmacy demand, particularly for GLP-1 products. Like-for-like retail sales rose 5.7%, while wholesale benefited from continued growth in The Local Choice network. The group now operates 355 stores, with results for FY2026 expected on 29 May.

Rolls-Royce Holdings Plc (RR) +0.91%

Rolls-Royce is reportedly preparing to announce a share buyback of up to £1.5 billion alongside its upcoming annual results, signalling continued balance sheet strength and confidence in cash generation, although the report remains unconfirmed. The group last upgraded guidance at its interim stage, lifting operating profit expectations to as much as £3.2 billion and free cash flow to £3.1 billion. The potential buyback underscores improving capital allocation flexibility following a period of restructuring, with investors likely to focus on execution against upgraded targets and the sustainability of cash flow momentum.

OpenAI (Not Listed)

OpenAI is scaling aggressively, targeting approximately $600 billion in cumulative compute investment through 2030 as it positions for a potential IPO that could value the group near $1 trillion. Financial performance remains robust, with 2025 revenue of $13 billion exceeding forecasts, while disciplined cost control kept spending below target at $8 billion. Strategic backing is deepening, with Nvidia reportedly nearing a $30 billion investment as part of a broader $100 billion capital raise. However, rising inference costs are pressuring margins, with adjusted gross margin declining to 33%, highlighting the capital intensity underpinning long-term growth ambitions.

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