Trading update : 22 January 2025

With all eyes on Davos as global leaders meet at the World Economic Forum, US President Donald Trump continues to reshape the established world order. While markets work to understand the implications and consider an investment universe with less US exposure, CEOs like Prosus’s Fabricio Bloisi are forging ahead with confidence and bold plans, with particular focus on AI-led expansion into emerging markets, like India and LatAm. 

Going global (ex-US) 

Global valuations suggest there is scope for further gains in equity markets, mostly outside the US. After its best year versus the US since 1993, the MSCI World ex-US is again beating the S&P 500 (VOO-NASQ) as renewed policy risks from the Trump administration push investors beyond the once-dominant market for superior returns. According to an analysis of major market fundamentals carried by Bloomberg, there’s ample room for the rest of the world to continue to beat US stocks, even if tech regains its mojo. Earnings trends point to Asia as offering the most compelling opportunities, while Europe and Canada are also on the list but with fewer options.

While tech has surprisingly cheapened elsewhere too, financials and materials have become some of the most overextended sectors worldwide. That leaves room for a potential re-rating as the earnings season globally kicks into high gear in the coming weeks.

The rotation has started

In markets, inflection points are only recognisable in retrospect – sometimes years later – but it looks, more and more, like US stocks hit an important turning point on the last Wednesday in October.

The Financial Times reported that up to that point, tech and consumer discretionary sectors had led the market, and highly speculative stocks of all sorts were popular. Since then, leadership has passed abruptly to solid old-economy sectors, such as materials, energy and consumer staples.

China’s capital homecoming

A record trade surplus racked up by China is washing up around the world, as export earnings that once ended up in state coffers instead fund massive private purchases of overseas securities and business expansion abroad.

Rather than leaving most of last year’s $1.2 trillion windfall in the hands of the central bank, some two-thirds of the foreign assets sourced primarily from global trade ended up with companies, individuals and state lenders.

That brings with it the risk of a sudden capital reversal that China doesn’t immediately control, especially in a world where the yuan is allowed to strengthen. Putting that money to work last year resulted in a $535 billion surge in Chinese private purchases of overseas securities like US stocks, European bonds and mutual funds, Bloomberg calculations show. Signs are already appearing of large repatriation of capital.

Based on official data, China recorded its “largest-ever” inflows of $128 billion in December — the most since 2015 — amid a sharp rise in companies’ conversion of foreign-exchange into the yuan, according to Goldman Sachs Group Inc.

Stock buying spree loading…

Chinese households are looking for higher-yielding investments as roughly $7 trillion in time deposits come due this year. According to Bloomberg, investors are considering moving into stocks, wealth management products or insurance, which would support Beijing’s efforts to cultivate sustainable market gains.

Netflix buffering…

Netflix (NFLX-NASQ) reported good numbers again, but the share price fell -4.8% after hours on concerns about subscription growth, and the implications of the deal to buy Warner Bros, which will require significant debt, a pause in share buybacks, and regulatory approvals. Increasing content costs were another reason for concern.

In the drink

The Financial Times reports that five of the biggest listed alcohol producers, including Diageo (DGEL-TRQX), are sitting on $22 billion worth of ageing spirits, according to company financial reports (the others are Pernod Ricard, Campari, Brown Forman and Rémy Cointreau). This is the highest level of inventory in more than a decade.

Smart snacking

Prosus (PRX-JSE) and Naspers (NPN-JSE)-owned Tencent Holdings, along with Fidelity International Ltd. and Temasek Holdings Pte, plan to invest in the IPO of Chinese snack retailer Busy Ming Group Co. on the Hong Kong stock exchange, reports Bloomberg. The IPO could raise as much as $500 million, with the three firms poised to be among the cornerstone investors.

Done deal

Brazil antitrust regulator Cade’s superintendence has approved the Anglo American (AALL-TRQX) deal to buy copper miner Codelco without restrictions, according to an official gazette and opinion on the agency’s website. Anglo and Codelco aim to add 2.7 million tons to output over a 21-year period.

Starting in stages

Sibanye Stillwater (SSW-JSE) and Finnish Minerals Group agreed that a staged start-up of the Keliber lithium project is the optimal approach, with construction phase remaining on track for completion in 1Q 2026 at a total capital investment of approximately EUR 783 million.

Making the connections

Speaking at the WEF in Davos, Prosus (PRX-JSE) CEO Fabricio Bloisi laid out a high-energy roadmap designed to transform the company from a “Tencent proxy” into a standalone global tech powerhouse.

This plan includes a shift toward aggressive value realisation: the company plans to deploy another $10 billion into high-growth markets, specifically targeting India and Latin America where it aims to build “$100 billion businesses.”

By accelerating IPOs in India and integrating AI across its massive e-commerce and delivery footprint, Prosus is moving to further narrow its discount to Net Asset Value (NAV) – which has already compressed significantly from 44% to 26% following recent successes.

Strategically, Prosus is positioning itself at the centre of a new “super app” evolution, using AI to connect real-world services like food delivery and payments into a seamless online ecosystem.

Sector focus: Iron ore

Iron ore sank for a fifth day as Beijing confirmed a big drop in steel production and the inaugural cargo from a major new mine in Africa – Guinea’s giant Simandou mine – arrived in China.

Bloomberg reported that steel production in China contracted by more than 4% to about 961 million tons in 2025, referencing figures from the statistics bureau. Inventories of the steel-making staple at China’s ports have expanded for the past seven weeks to 155.4 million tons, the highest level since April 2022.