Visa beats earnings, hikes outlook, unveils massive $30bn buyback

Local Market Commentary

The Top 40 and All Share indices rose by 0.68% and 0.65%, closing at 83,976.98 and 91,311.15 points respectively. The market gained modest ground as investors looked ahead to key local data releases on credit extension, the national budget, and trade figures to gauge the strength of economic momentum. Naspers appointed Nico Marais as Group CFO and financial director, with a Prosus board seat anticipated post-AGM in August. Meanwhile, Botswana expressed confidence in Anglo American’s ability to divest De Beers this year amid ongoing diamond market weakness; Anglo, which holds 85%, plans to exit the unit by H2 2025 following a $4.1 billion write-down.

European Market Commentary

European equities extended their rally into a sixth session, with the STOXX 600 closing 0.4% higher, led by aerospace and defence, as upbeat earnings from HSBC and Deutsche Bank bolstered financials. Market focus remains on corporate commentary regarding U.S. tariffs, while euro zone consumer inflation expectations ticked higher and German sentiment improved amid political stability. Corporate earnings expectations have also brightened, with Q1 earnings now forecast to decline by just 1.7% versus last week's -3.5%, while revenue growth is seen at 1.4%, reflecting improving business resilience compared to last year’s declines.

U.S. Market Commentary

U.S. equities ended higher on Tuesday despite volatile intraday moves, as investors weighed corporate earnings, mixed economic data, and evolving trade developments. Treasury Secretary Bessent warned China could face steep job losses from tariffs, though progress was noted in trade talks with Japan and India. President Trump signed a tariff relief order for U.S.-based automakers just before the close, easing pressure on supply chains. Meanwhile, the U.S. trade deficit hit a record in March, and consumer confidence dropped to its lowest since May 2020, underscoring the growing economic impact of trade tensions.

Asia Market Commentary

Asia-Pacific markets showed mixed performance on Wednesday as investors analysed a series of key economic data. Australia’s first-quarter inflation rose by 2.4%, matching the previous quarter’s rate and surpassing expectations of a 2.3% increase. Inflation in Australia has been moderating from a high of 7.8% at the end of 2022. In contrast, China’s manufacturing activity declined more than expected, slipping into contraction with a PMI of 49.0 in April, down from 50.0 in March, as the ongoing trade conflict with the U.S. weighed on trade and economic conditions.

Commodity Market Commentary

Gold prices declined on Wednesday, weighed down by a stronger dollar and reduced trade tensions between the U.S. and its partners, as investors awaited key U.S. data for insights into the Federal Reserve's rate policy. Oil prices extended their losses, heading for their largest monthly drop in over three years due to the global trade war's impact on fuel demand and concerns about rising supply. OPEC+ members are reportedly considering further output hikes in June, while U.S. crude oil inventories rose by 3.8 million barrels last week, adding pressure to oil prices.

Currency Market Commentary

The South African rand weakened on Tuesday as investors awaited details on when Finance Minister Enoch Godongwana would present a revised national budget following the scrapping of a controversial VAT hike. Meanwhile, the U.S. dollar remained steady on Wednesday but was on track for its weakest monthly performance since November 2022, as erratic trade policies under President Donald Trump dampened confidence, strengthening the euro, yen, and Swiss franc. Trump's tariff announcements earlier in April caused a global stock market sell-off and led investors to move away from the traditionally safe-haven U.S. dollar and Treasury debt.

WeBuyCars Holdings Limited (WBC) -3.00%

WeBuyCars anticipates core headline earnings of between R500.2 million and R516.3 million for the six months ended 31 March 2025, representing 24%–28% year-on-year growth, underpinned by a normalisation of earnings following once-off listing-related costs in the prior period. Basic and headline earnings are expected to more than double from a R69.5 million loss, while core HEPS is set to rise modestly by up to 4% (to between 119.4 and 124.2 cents) due to share dilution from its pre-listing capital raise and JSE debut on 11 April 2024. The company will release unaudited interim results on SENS on 19 May 2025, with a webcast presentation at 09h00.

Astoria Investments Limited (ARA) 0.00%

Astoria Investments reported a 6.23% quarter-on-quarter decline in NAV per share to $58.13 (ZAR 1,068.94) for Q1 2025, driven by sustained pressure on diamond market valuations across its key holdings—Trans Hex Group, Trans Hex Marine, and TIS Management. The NAV contraction (8.69% in ZAR terms) was the main driver of the softer result, though basic and headline loss per share improved markedly to -$3.86 (-71.54 ZAR cents) from -$17.33 (-317.60 ZAR cents) in Q4 2024. No interim dividend was declared, and valuations for unlisted assets remain unchanged unless materially impacted.

Visa Inc. (V) +1.19%

Visa reported better-than-expected quarterly earnings, benefiting from an 8% rise in payment volumes and a 9% increase in revenue, which reached $9.6 billion. The company also raised its annual net revenue growth forecast to low double-digits, exceeding Wall Street's 10% growth expectation. Visa unveiled a $30 billion share repurchase plan, surpassing last year's $25 billion buyback. The company posted an adjusted profit of $5.4 billion, or $2.76 per share, compared to $5.1 billion, or $2.51 per share, in the same period last year, beating analysts' expectations of $2.68 per share.

United Parcel Service Inc. (UPS) -0.37%

United Parcel Service announced plans to cut 20,000 jobs and close 73 facilities as part of a strategic reduction in deliveries for Amazon, its largest customer, due to a 50% drop in shipping volume. This decision is also tied to ongoing cost-cutting initiatives and broader operational restructuring. UPS cited the impact of U.S. trade policies under President Donald Trump, which have contributed to slowing economic growth and raised recession concerns. The company, which is contractually committed to creating 30,000 jobs under its national agreement with the Teamsters union, aims to cut $3.5 billion in costs by 2025. For Q2, UPS forecasts a total operating margin of 9.3%, below the double-digit margins typically expected by investors.

Starbucks Corporation (SBUX) +1.13%

Starbucks faced challenges in its efforts to revive its business, as CEO Brian Niccol reported disappointing global comparable sales and profit for the fiscal second quarter ending March 30. North American same-store sales fell by 1%, worse than the 0.24% decline analysts had forecast, with inflation and economic uncertainty driving up costs and reducing U.S. demand. However, sales in Canada returned to growth, and international sales showed improvement, with China, its second-largest market, stabilising after four quarters of decline. Despite a 2% rise in international comparable sales, Starbucks posted a 590 basis-point drop in gross margin and adjusted earnings per share of 41 cents, missing the 49 cents expected by analysts.

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