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Local Market Update

The Johannesburg Stock Exchange experienced a decline in share prices, with the Top-40 index, representing blue-chip stocks, down by 1.77%, and the broader All-Share index down by 1.56% (now at 76,748 index points). This negative trend can be attributed to the prevailing sentiment surrounding South Africa, which has been adversely affected by the unprecedented rolling blackouts. Businesses and households are currently facing up to 10 hours of power outages on a daily basis, creating significant challenges. In other news, South Africa's automotive industry is taking steps towards embracing electric vehicles (EVs) by announcing plans to issue a tender, valued at hundreds of millions of rands, for the implementation of EV charging infrastructure nationwide.

European Market Update

Tuesday saw European stock markets closing lower. The euro zone Composite Purchasing Managers' Index (PMI) for May indicated strong growth driven by the services sector, while manufacturing faced challenges due to weak demand and declining selling prices. On a different note, the International Monetary Fund (IMF) forecasts that the United Kingdom (U.K.) will avoid a recession in 2023; however, the country's growth is expected to be modest. According to the latest estimates, U.K. GDP is projected to grow by 0.4% this year, which is an improvement from the IMF's April estimate of a 0.3% contraction, indicating a positive shift in the economic outlook.

US Market Update

US stocks experienced a decline as discussions surrounding the debt ceiling showed limited progress, causing uncertainty among investors. With the June 1 X-date, anticipated by Treasury Secretary Janet Yellen, approaching rapidly, investors were hoping for more clarity regarding the situation. However, some House Republicans expressed doubts about the projected default date, further adding to the uncertainty. Meanwhile, Apple's stock dropped by 1.5% following the announcement of a significant chip production deal with Broadcom. In contrast, Broadcom's stock gained 1.2% as a result of the deal.

Asia Market Update

This morning, most Asia-Pacific markets experienced a decline. The Reserve Bank of New Zealand raised its benchmark policy rate to 5.5%, aligning with expectations from economists surveyed by Reuters. However, New Zealand faced challenges as retail sales volume fell by 4.1% year-on-year in the first quarter, marking the second consecutive quarterly contraction following a 4% decline in the previous quarter ended December. In the stock market, shares of Chinese tech giant Tencent and K-Pop company Hybe slid after reports emerged about a music distribution deal signed between a Tencent subsidiary and the South Korean agency. The news had a negative impact on the stock prices of both companies.

Commodity Market Update

During morning trading, gold prices remained within a limited range following inconclusive discussions on the U.S. debt ceiling, leaving investors uncertain. Additionally, market participants were eagerly anticipating the release of the Federal Reserve's meeting minutes to gain insights into the future trajectory of interest rates. On the other hand, oil prices saw an increase earlier today. This rise was attributed to tightening U.S. oil and fuel supplies and a warning from the Saudi energy minister directed at speculators, hinting at potential output cuts by OPEC+. Sources citing figures from the American Petroleum Institute reported a decline of approximately 6.8 million barrels in crude inventories for the week ending May 19.

Currency Market Update

On Tuesday, the South African rand remained relatively stable after experiencing a minor recovery the previous day. This recovery was prompted by relief over the country's credit rating not being downgraded and expectations of a significant interest rate increase from the central bank during the week. By the end of the trading session, the rand was trading at around R19.15 to the dollar, showing a 0.49% improvement. In contrast, the U.S. dollar maintained its position near a two-month high due to safe-haven demand. This was driven by prolonged negotiations surrounding the U.S. debt ceiling.



We would like to inform you that based on our assessment, there is a reasonable degree of certainty regarding the company's financial performance for the year ended March 31, 2023. We anticipate reporting an increase in basic earnings (profit) per share, ranging between 3,837.4 cents and 4,094.4 cents, representing a growth of approximately 49.3% to 59.3% compared to the prior year's earnings of 2,570.3 cents per share. Additionally, we expect headline earnings (profit) per share to increase between 1,984.6 cents and 2,116.7 cents, reflecting a growth of approximately 50.2% to 60.2% compared to the previous year's figure of 1,321.3 cents per share. We will provide a more comprehensive report and detailed financial information in due course. Your continued support is greatly appreciated.


In the fiscal year, GII achieved a remarkable 19.1% increase, reaching GBP1,439.3 million (FY22: GBP1,208.1 million). This growth was driven by strong demand from corporate and public sector customers across software, hardware, and services. Revenue saw a significant rise of 26.5% to GBP184.4 million (FY22: GBP145.8 million - restated). The customer base expanded to 5,941 (FY22: 5,330 customers), with a higher gross profit (GP) per customer of GBP21,800 (FY22: GBP20,100), contributing to a GP growth of 20.7% to GBP129.6 million (FY22: GBP107.4 million). Operating profit increased by 20.6% to GBP50.9 million (FY22: GBP42.2 million), while adjusted operating profit (AOP) rose by 21.8% to GBP56.4 million (FY22: GBP46.3 million), maintaining a consistent AOP as a percentage of GP at 43.5%. Adjusted earnings per share also demonstrated a positive trend, increasing by 23.1% to 18.83 pence (FY22: 15.30 pence). The full year cash conversion reached an impressive 84.3%, with particularly strong conversion in the second half of the financial year. The Board has proposed a final dividend of 5.1 pence per share and a special dividend of 7.5 pence per share. This represents a 21.4% increase over last year's payment for the final dividend and a matching 21.0% increase for the special dividend, resulting in a full year dividend of 7.5 pence per share. GII's growth in FY23 was driven by customer demand for security, cloud adoption, digital transformation, hybrid datacentres, and remote working solutions. Notably, 96% of GP came from customers who traded with BTG last year, maintaining a renewal rate of 116%. To meet customer demand, the group increased its headcount by 20% to 930. Bytes Software Services was recognized as Microsoft Partner of the Year for Operational Excellence, while Phoenix Software received the Dell Technologies Public Sector Partner of the Year 2022 award. Both Bytes Software Services and Phoenix Software obtained Great Place to Work certification. In April 2023, GII acquired a 25.1% interest in AWS partner, Cloud Bridge Technologies, to enhance its access to resources and support its long-term multi-cloud strategy.



Netflix has extended its crackdown on password sharing to the United States. The popular streaming service has recently informed its members about a revised sharing policy, emphasizing that Netflix accounts are intended for use within a single household. In an email posted on its blog, Netflix stated, "Your Netflix account is for you and the people you live with — your household." The email also outlined two options for non-household members: they could transfer their profile to start a separate paid membership, or they could pay an additional fee of $7.99 per month per person using the same account. Notably, Netflix's standard and premium plans offer the option to add extra members without ads. The company's decision to tighten password sharing guidelines stems from its efforts to increase revenue and subscriber numbers, prompted by a period of stagnating growth. With over 100 million households (roughly 43% of its global user base) sharing accounts, Netflix claims that this practice has impacted its ability to invest in new content.

APPLE (AAPL) -1.5%

On Tuesday, Apple unveiled a significant collaboration with Broadcom aimed at developing 5G radio frequency components within the United States, in a deal worth billions of dollars. Apple CEO Tim Cook expressed his excitement about this partnership, stating in a press release, "We're thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing." This agreement with Broadcom is a key part of Apple's 2021 pledge to invest $430 billion in the U.S. economy, showcasing their dedication to bolstering domestic manufacturing. Notably, this venture builds upon the existing relationship between the two companies, as Broadcom had previously announced a wireless component sale worth $15 billion to Apple in 2020.

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Research Team
Media, Sasfin Wealth