SAP Surpasses Novo Nordisk as Europe's Largest Company Amid Cloud and AI Optimism

Local Market Commentary

The Top 40 index declined 0.58% to 81,617.4 points, while the All Share index fell 0.6% to 88,985.6 points. In a significant move, South Africa has invited private sector involvement to rehabilitate freight-rail lines and ports, aiming to improve exports for companies such as Glencore, Anglo American Plc, and BMW AG. Meanwhile, Eskom has added an 800-megawatt unit at Kusile Power Station to the national grid, advancing its goal of bringing 2,500 megawatts of new capacity online by the end of March to mitigate power shortages.

European Market Commentary

European shares ended nearly unchanged on Monday as investors remained cautious, despite growing optimism that U.S. President Donald Trump may take a softer stance on tariffs. The STOXX 600 closed 0.1% lower, reversing earlier gains after data showed eurozone business activity expanded at its fastest pace in seven months. Germany’s private sector saw its strongest growth in ten months, driven by a rebound in manufacturing output, with the HCOB German flash composite PMI rising to 50.9 in March from 50.4 in February, signalling continued economic expansion. European equities have become more attractive as economists lower U.S. growth forecasts due to Germany’s fiscal stimulus and ongoing trade tensions.

U.S. Market Commentary

The S&P 500 surged to a two-week high on Monday, driven by gains in Nvidia and Tesla amid speculation that the Trump administration may adopt a more measured approach to tariffs. Tesla soared nearly 12%—its largest one-day increase since November—partially recovering recent losses on renewed tariff optimism. Meanwhile, U.S. business activity strengthened in March, though concerns over import tariffs and government spending cuts weighed on sentiment. Investors are now focused on upcoming economic data, particularly the Personal Consumption Expenditure price index, the Federal Reserve’s preferred inflation measure, due on Friday.

Asia Market Commentary

Asia-Pacific markets traded mixed as investors weighed U.S. President Donald Trump’s tariff threats. Minutes from the Bank of Japan indicated that further interest rate hikes would be considered if economic and inflation trends align with expectations. One board member highlighted that real interest rates are likely to remain deeply negative even after the recent policy rate increase, suggesting the need for continued tightening to narrow this gap.

Commodity Market Commentary

Gold edged lower as risk sentiment improved following U.S. President Donald Trump’s announcement that not all proposed tariffs would take effect on April 2. Additionally, a Federal Reserve official signalled caution regarding rate cuts this year. Meanwhile, oil prices remained steady as investors balanced the potential impact of U.S. tariffs on buyers of Venezuelan oil against the broader economic effects of tariffs on industries such as automobiles and their implications for global oil demand.

Currency Market Commentary

The South African rand strengthened on Monday as investors awaited further details on U.S. President Donald Trump’s next round of tariffs. Sterling also advanced ahead of UK Chancellor Rachel Reeves’ Spring budget update, supported by data showing an improvement in business activity within the country’s services sector. Meanwhile, the dollar hit a three-week high against the yen and remained firm across the board, buoyed by strong U.S. services data and cautious optimism over trade policy. Trump’s indication that not all proposed tariffs would take effect on April 2, with potential exemptions for some countries, helped lift the dollar and improve sentiment on Wall Street by easing concerns over U.S. growth.

Astral Foods Limited (ARL) -0.69%

Astral Foods' earnings for the six months ending 31 March 2025 are expected to decline due to selling price deflation on chicken, higher poultry feed costs driven by the 2024 drought, and a challenging consumer environment. A cybersecurity incident in March 2025 impacted the Poultry Division, leading to downtime and an estimated revenue loss of R20 million. The company expects a decrease of up to 55% in EPS and 60% in HEPS compared to 1H2024, reflecting these challenges.

Premier Group Limited (PMR) +7.61%

Premier Group expects strong earnings increase for FY2025, with EPS projected to rise by 23-33% and HEPS by 20-30%. This growth comes despite the difficult economic environment marked by high interest rates, reduced consumer spending, and commodity price volatility. Premier attributes the improvement to effective margin management, operational efficiencies, and cost-saving initiatives. The company will release its full year results on or around 10 June 2025.

Raubex Group Limited (RBX) +3.80%

Raubex forecasts strong earnings growth for FY2025, with EPS expected to increase by 25-35% and HEPS by 15-25%. The company has benefited from its diversified strategy, with strong performances in the Roads, Earthworks, Construction Materials, and Infrastructure divisions, as well as key projects in South Africa and Australia. However, the Materials Handling and Mining Division faced a decrease in profit due to the drop in chrome prices, particularly from Bauba’s operations. Results are expected to be published on 12 May 2025.

ADvTECH Limited (ADH) -0.32%

ADvTECH reported an 8% revenue growth to R8.52 billion for the year ended 31 December 2024, driven by strong operational performance. Operating profit grew by 14%, and normalised earnings rose by 17%. Both EPS and HEPS increased by 16%. The company declared a final gross dividend of 63.0 cents per share, bringing the total dividend for the year to 101.0 cents per share, a 16% increase from the previous year. The dividend cover was maintained at 2.0 times.

STADIO Holdings (SDO) +3.30%

STADIO Holdings achieved robust growth for the year ended 31 December 2024, with revenue rising by 14% to R1.6 billion. Student numbers also grew, with a 10% increase in Semester 1 and an 8% increase in Semester 2. EBITDA increased by 17%, and profit after tax rose by 17%. Core headline earnings surged by 28%, and EPS rose by 26%. The company declared a 51% increase in its final dividend, bringing it to 15.1 cents per share, up from 10.0 cents in 2023.

SAP SE (SAP) +1.35%

SAP has surpassed Novo Nordisk as Europe's largest company by market capitalisation, driven by strong investor confidence in its cloud business and potential gains from generative AI investments. Despite rising 7% in 2025—trailing the STOXX 600’s 8.3% gain—SAP has delivered a total return of 160% since the end of 2022, significantly outperforming the index’s 28% increase. Meanwhile, Novo Nordisk has faced recent underperformance following investor disappointment over trial data for its next-generation obesity drug, Cagrisema.

Lukoil (Not Listed)

Lukoil, Russia’s second-largest oil producer, reported a 26.5% drop in net profit for 2024 to 848.5 billion roubles ($10.12 billion), primarily due to higher taxes. Despite this, revenue increased to 8.6 trillion roubles from 7.9 trillion roubles in 2023. The broader Russian corporate sector has been impacted by tax hikes aimed at financing Moscow’s ongoing military campaign in Ukraine.

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