CoreWeave's Nasdaq Debut Flat Amid AI IPO Jitters

Local Market Commentary

The JSE ended the week lower, with the Top 40 down 0.41%, ending at 82,196.8 points, and the All Share Index shedding 0.36%, closing at 89,572.6 points, as political deadlock over a proposed VAT hike continued to unsettle investors.The ANC and DA remain at odds, delaying budget approvals and fuelling uncertainty. Meanwhile, South Africa is seeking to stabilise trade relations with the US after its ambassador’s expulsion, preparing a bilateral trade agreement to mitigate risks should it lose preferential market access. A South African business delegation also engaged with US firms in New York to assess potential trade disruptions. In corporate developments, Capitec Bank appointed Graham Lee as its next CEO, succeeding Gerrie Fourie from 19 July.

European Market Commentary

European equities closed lower on Friday, with the STOXX 600 falling 0.7%, marking a 1.4% weekly decline—the worst since December. Sentiment weakened as US inflation concerns resurfaced, compounded by fears over Trump’s 25% tariffs on imported vehicles and auto parts. Germany’s unemployment rate climbed at its fastest pace since October 2024, highlighting ongoing economic strain despite labour shortages. However, softer-than-expected inflation in Spain and France bolstered expectations of an ECB rate cut in April, reinforcing hopes for monetary easing.

U.S. Market Commentary

Wall Street ended the week sharply lower, led by selloffs in Amazon, Microsoft, and other tech heavyweights, as economic data reignited concerns over inflation and slowing growth. While consumer spending rebounded in February, it was weaker than forecast, while core inflation saw its sharpest rise in over a year. A University of Michigan survey showed inflation expectations at a two-and-a-half-year high, amplifying fears that Trump’s tariff policies could drive up costs and constrain the Fed’s ability to ease policy. With these headwinds, the S&P 500 is now down 9% from its February peak, while the Nasdaq has lost 14% since December.

Asia Market Commentary

Asian markets opened the week sharply lower as investors braced for additional US tariffs, with Japan’s Nikkei 225 plunging nearly 4%. Despite trade risks, China’s manufacturing PMI rose to 50.5 in March, the highest in a year, indicating that Beijing’s stimulus efforts are bolstering economic activity. Japan’s factory output rebounded 2.5% in February, surpassing expectations, though retail sales growth slowed to 1.4% year-on-year, missing forecasts and raising concerns over domestic demand. Meanwhile, Thailand’s stock exchange remained stable despite a major earthquake in Myanmar that caused structural damage in Bangkok.

Currency Market Commentary

The South African rand weakened on Friday amid budget uncertainty and broader global risk aversion linked to Trump’s escalating trade policies. The US dollar also softened as growth concerns mounted ahead of Trump’s expected reciprocal tariff announcement later this week. Meanwhile, the Japanese yen strengthened as investors moved into safe-haven assets, mirroring gold’s record-breaking rally. With details on Trump’s trade measures still unclear, currency markets remain volatile heading into a pivotal week for global trade negotiations.

Commodity Market Commentary

Gold surged past $3,100 per ounce for the first time, as investors sought safety amid heightened geopolitical risks and uncertainty over Trump’s latest trade policies. Meanwhile, oil prices edged lower, heading for a slight quarterly loss, as concerns over global trade disruptions offset supply-side risks. Trump’s warning of secondary sanctions on Russian oil buyers added to market volatility, with potential implications for energy flows and pricing.

MultiChoice Group Limited (MCG) -0.81%

MultiChoice Group (MCG) continues to face significant macroeconomic headwinds, with ongoing consumer strain and currency volatility impacting performance into FY25. In South Africa, negative subscriber growth persists amid a constrained consumer environment, while in the Rest of Africa, economic pressures, power disruptions, and currency depreciation remain key challenges. Increased investment in streaming and broader cost-of-living pressures have further weighed on financial performance. Although the group has returned to a positive equity position, capital preservation remains a priority. Phuthuma Nathi shareholders should note that any potential MCSA dividend for FY25, to be decided in June, is expected to be significantly lower than in prior years. MultiChoice's detailed annual results are set for release on 12 June 2025.

Bell Equipment Limited (BEL) -0.21%

Bell Equipment reported a 13% decline in revenue to R11.7 billion for FY24, reflecting softer demand across key sectors. Operating profit dropped 37% to R754 million, while net profit contracted by 41% to R471 million. Despite these pressures, the company achieved a strong turnaround in cash flow, posting a net inflow of R458 million compared to an outflow in the prior year. Headline earnings per share fell 42% to 465 cents, though net asset value per share increased 7% to 5,936 cents. Encouragingly, the board has reinstated dividends, declaring a final cash dividend of 160 cents per share. Investors are advised to review the full audited financials available on the company’s website.

Telkom SA SOC Limited (TKG) +0.91%

Telkom has advised shareholders that basic earnings per share (BEPS) for FY25 will rise by at least 300% to 1,542 cents, while headline earnings per share (HEPS) is expected to increase by a more modest 10% to 413.6 cents. This sharp earnings uplift is primarily attributed to the non-recurring profit from the successful sale of Swiftnet, which closed on 27 March 2025, generating a provisional cash inflow of R6.575 billion. While the financials remain unaudited at this stage, a further trading statement will be issued once a clearer earnings range is determined. Full FY25 results are scheduled for release on 10 June 2025.

Netcare Limited (NTC) +0.38%

Netcare’s trading update for H1 2025 highlights a 1.1% expected increase in total paid patient days (PPD) compared to H1 2024, with acute hospital activity driving a 1.5% growth in PPD and improved occupancy levels. Acute hospital revenue per PPD rose by 4.5%, though mental health services saw a slight decline due to capacity constraints from refurbishments. The group remains focused on operational efficiency and innovation, targeting revenue growth of 5% to 6% for FY 2025. Netcare also completed a share buyback of 27.8 million shares and continues to prioritise capital efficiency. Strategic projects are progressing well, supporting its long-term digital and data-driven healthcare vision. The company has provided guidance of between 0.8% and 1.3% growth in PPD for the year, alongside estimated capital expenditure of R1.5 billion. Additionally, following Mark Bower's retirement, Alex Maditse was appointed as Chairperson from January 2025. Full H1 2025 results are expected by 19 May 2025.

PetroChina Company Limited (601857) -1.22%

PetroChina reported a record net profit of 164.7 billion yuan ($22.68 billion) in 2024, up 2% year-on-year, despite a 2.5% revenue decline to 2,938.0 billion yuan due to lower crude prices. Oil production rose 0.5% to 941.8 million barrels, while natural gas output grew 4.1% to 5,133.8 bcf. Refinery output dropped 1.5% as weaker economic growth and rising electrification reduced fuel demand. In line with Beijing’s industry-capacity controls, PetroChina permanently shut half of its largest refinery in late 2023. For 2025, it forecasts crude output at 936.2 million barrels and natural gas at 5,341 bcf, with capital spending set at 262.2 billion yuan.

CoreWeave Inc. (COREW)

CoreWeave's Nasdaq debut saw shares closing flat after opening nearly 3% below the $40 IPO price, valuing the Nvidia-backed AI infrastructure firm at $23 billion on a fully diluted basis. The subdued performance, following a downsized IPO raising $1.5 billion, raises concerns over AI infrastructure sentiment and broader IPO market recovery amid market volatility. Despite securing an $11.9 billion contract with OpenAI and maintaining stable ties with Microsoft, CoreWeave faces rising debt of $8 billion and $2.6 billion in operating lease liabilities. Originally an Ethereum miner, the company pivoted to AI after Ethereum’s 2022 upgrade, driving over eightfold revenue growth last year.

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