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JSE up for third consecutive day

Johannesburg - The Naspers [JSE:NPN] share price is on the run again and the stock’s movement was the main reason why the major indices on the JSE were higher for the third consecutive day by midday on Thursday.

Technical analysts said there is further upside potential for the All-Share index and the Top 40-index, but this will reflect a move in Naspers rather than broad-based strength across a number of equities and sectors.

By midday Naspers was another 4.57% up at yet another high of R1 9654.99. Shares worth more than R1bn were traded during the morning in more than 5 000 transactions.

As usual the Naspers share price was supported by Chinese internet giant Tencent, which gained almost 4% in Hong Kong where the Hang Seng index has traded beyond 27 000 points, adding more than 3% in early trade. This was largely on the back of Tencent's remarkably brisk move.

With Naspers representing 12% of the JSE Industrial index's weight, the index reached a new high for the second day in a row. It improved by 1.11% to 67 724, beating Wednesday’s closing high of 66 869.

This resulted in the All-share index gaining 0.44% to 53 036, and the Top 40-index trading 0.48% higher to 46 854. This was the first time the All-share index traded above 53 000 since February, when it reached a new high of 53 344.

The technical analysts of Imara SP Reid said in their daily Market Snapshot that the Top 40-index is technically targeting a minor resistance area at 47 740 points. A break beyond this level will offer some encouragement, but it is important to note that the upside move is likely to take place without broad-based support, as Naspers will play a dominant role in the upside momentum.

International analysts also think Tencent’s share price has more upside potential. Research done by Reuters indicates that the company’s discount to Facebook is getting harder to justify. The Chinese social media giant brought in roughly the same amount of revenue as its US counterpart last year and was more profitable, yet trades at a lower earnings multiple. The valuation gap warrants a rethink.

Tencent shares trade at 33 times forecast net profit for the next 12 months. Facebook shares are on 39 times.

Among the other heavyweights in the record-breaking industrial index, Richemont [JSE:CFR] was trading above R100 a share again after gaining 2.57% to R101.55. It is however still more than 2% lower for the year. British American Tobacco [JSE:BTI] is still more than 1% lower for the year, despite being 0.83% higher at R636.58 on Thursday morning. SABMiller [JSE:SAB] lost 0.62% to R639.55.

Retail shares are however on the up with Clicks [JSE:CLS], Spar [JSE:SPP] and Mr Price [JSE:MPC] all trading at 52-week highs on Thursday morning. Spar gained 1.07% to R193.80, while Clicks was 0.89% higher at R95.64. Mr Price improved by 0.64% to R278.26.

Cashbuild [JSE:CSB] was only 1c higher by Thursday midday, but it was enough for a new record of R242.01. The share has gained 61.3% so far this year, while Spar gained almost 25%, Clicks more than 22% and Mr Price over 17%.

The dollar was stronger on Thursday morning which hurt commodities, with the Resources index as well as the Gold index lower. Resources lost 1.91% and the Gold index 1.70%, after strong runs on Wednesday.

Kumba [JSE:KIO], the star on Wednesday when it closed 4.7% higher, gave most of the gains back on Thursday morning and by midday was 2.17% lower at R142.34. At one stage it traded as low as R139.00.

Anglo American [JSE:AGL] also lost ground again on Thursday morning, trading 1.65% lower at R178.93. BHP Billiton [JSE:BIL] lost 1.27% to R256.74.

              
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Rand - Dollar
18.94
-0.0%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.13
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Platinum
908.05
+1.2%
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1,014.94
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Gold
2,232.75
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Silver
24.95
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Brent Crude
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Top 40
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All Share
74,536
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Resource 10
57,251
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Industrial 25
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Financial 15
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