Trading update : 5 December 2025

Strategic AI interests are shaping the geopolitical and business landscapes, driving focused investments and literal power plays. A growing, high-spending crypto-wealthy consumer segment is proving a tailwind for luxury retail, while global investors are finding value in UK equities while anticipating broader global equity growth outside the US, with a China a major beneficiary of sustained inflows. Locally, business sentiment is rebounding, and the retail sector is flashing positive signals.

AI power play

The Wall Street Journal reported that the Trump administration plans to inject up to $150 million into startup xLight to develop more advanced chip-making techniques in the US.

A Bloomberg report also revealed that the US is seeking agreements with eight allied nations, including the Netherlands, the UK, Israel and the UAE, as part of a fresh effort to strengthen supply chains for the computer chips and critical minerals needed for AI.

With this focus on AI, BloombergNEF predicts that power demand from US data centres will surge to 106 GW by 2035, a 36% increase from the research provider’s previous outlook in April. A gigawatt is roughly the output of a single nuclear reactor and can power around 750,000 US homes.

Crypto wealth spurs spending

There is no precise, universally accepted percentage for how much of all luxury spending is related to cryptocurrency wealth, as spending habits are diverse and data collection methods vary.

However, industry reports indicate that crypto-wealthy individuals are a significant and growing consumer segment within the luxury market, and in some specific contexts, a notable portion of sales has been linked to crypto profits.

The number of crypto millionaires is increasing, with reports from Henley & Partners indicating a record 241,700 individuals worldwide held crypto fortunes as of late 2025. This new generation of wealthy individuals is driving a new wave of consumption.

Black Friday jumpstart

Price inflation in British shops eased to the lowest level in five months in November, according to data from the BRC reported by Bloomberg, as retailers rolled out Black Friday deals earlier than usual.

Flow reversal

According to a Bloomberg report citing Morgan Stanley data, foreign fund inflows into Chinese equities held steady at $2.3 billion in November, with passive allocations accelerating.

Cumulative foreign long-only fund inflows improved to $10 billion year to date, which is a notable reversal from the $17 billion in outflows recorded in 2024.

UK upside

The rally in equity markets is likely to continue to broaden outside the US, while earnings and dividend growth will drive markets higher, according to Goldman Sachs strategist Peter Oppenheimer.

“We do expect rates to come down in the US,”

Oppenheimer says in an interview on Bloomberg TV.

“That, coupled with ongoing economic growth and some moderation in the dollar, is a reasonably good set-up for risk assets and equities in general”.

Still, he sees limited upside for stocks overall “because valuations are reasonably high”.

He noted that domestic UK stocks are likely to see a boost from a continued drop in gilt yields. “For people looking at value, the UK is quite an attractive proposition,” added Oppenheimer.

Prudent exit?

US insurer Prudential Financial Inc. is considering selling its stake in Alexforbes (AFH-JSE). Prudential notified African Rainbow Capital (AIL-JSE) and Alexforbes about its plans, citing a change in strategy, though no final decisions have been made.

According to Bloomberg, Prudential owns about a third of Financial Services Brand Alexforbes, which has a current market value of R10.7 billion, and said it regularly evaluates strategic opportunities to ensure they are aligned with its long-term strategy.

Mood momentum

South African business sentiment rebounded in Q4, which is a signal that the economy is regaining momentum. A quarterly business confidence index compiled by FirstRand Ltd.’s Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research rose by five points to 44 for the three months that end Dec. 31, according to insights from a report carried by Bloomberg.

Hot wheels

New vehicle sales in SA surged 12.5% year on year in November, with passenger car sales up 11%. Taxi and bakkie units were up 20%. Suzuki and Chinese brands dominated, with Motus (MTH-JSE) import brands taking a backseat in the resurgent market this month.

However, the company stated in its recent update that retail sales were running in line with market growth at roughly 20% after pivoting hard toward the new entrants.

Motus stock continued to give back some of the recent rally on the latest figures and a potential fading in the supportive tailwinds.

Reconstructive surgery

Healthcare company Mediclinic Holdings (MEI-JSE) is undergoing some reconstructive surgery, which could signal a potentially favourable period for investors. The company’s major shareholder, Remgro (REM-JSE), plans to take full ownership of the South African operations (Mediclinic Southern Africa), while the other joint venture partner, IHL, will take full control of the Swiss operations (Hirslanden). Both parties will keep their current joint interests in the Middle East and Spire businesses.

This move is viewed positively as it allows Remgro to gain full control of the South African business at an implied lower valuation (6.3x EV/EBITDA) compared to the higher-multiple Swiss business (9.4x EV/EBITDA), which has faced structural challenges and higher debt.

This strategic realignment is expected to enhance focus and agility in their respective home markets. The transaction is expected to conclude in early 2026.

Stock focus: Fortress Real Estate

This quarter’s results for Fortress Real Estate were stable and met expectations, delivering a clean slate with no operational or balance sheet concerns.

The headline positive is the increased confidence from management, who have raised their distributed earnings per share (DIPS) growth guidance from a previous range of 6.0%-7.5% up to 7.3%-8.8%, with current performance already at 7.8%.

Crucially, the fund successfully addressed a major vacancy risk in Poland by letting the large 4,152m² space, effective April 2026, which will drop the overall vacancy rate from 15% to a more manageable 10%.

This result is strong, but the stock appears fully priced by the market, and analysts note that the 7.2% dividend yield and the narrowing 5% discount to NAV suggest the current price already reflects the good news. While the rising earnings outlook is attractive for long-term income, value investors may view the current valuation as too rich.