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Naspers takes beating, drags JSE down

Johannesburg - Profit-taking in Naspers shares continued unabated on Tuesday after investors started taking advantage of the record run through the R2 000 mark in the previous session.

By midday on Tuesday Naspers [JSE:NPN] was already 4.03% lower than Monday’s R1 900.11 close and huge volumes of shares were traded.

Naspers, which constitutes 9% of the All-share index, subsequently pulled it as well as the Top 40- and Industrial indices down from their record highs.
 
The All-share index was 0.46% lower at 53 343 points, while the Top 40-index lost 0.45% and the Industrial index 0.92%. The Resources index, which did not share in the excitement of the previous trading sessions, gained 1.28% as investors looked for bargains.
 
Trading on Tuesday morning was totally dominated by Naspers and 767 million shares were traded by midday for an astronomical R1.48bn. The second highest was Steinhoff [JSE:SHF], with shares to the value of R615.5m changing hands.
 
By midday, there were already 5 313 transactions in Naspers shares and 2 553 transactions in the second most traded stock Sasol [JSE:SOL], showing that investors were seriously offloading the media giant.
 
Naspers added to its meteoric rise on Monday, at one stage climbing as high as R2 029. However, it closed well below this level at R1 980, still a new record. On Tuesday morning the share opened sharply lower at R1 916, but improved to R1 959.

Naspers, which had a market capitalisation of R806bn on Tuesday morning and is currently trading at a price earnings ratio of 112 and a dividend yield of 0.2%, largely tracked losses in Chinese internet giant Tencent.

Tencent, in which Naspers holds a 34% shareholding, also succumbed to profit-taking and lost favour with investors after billionaire chairperson Ma Huateng cut his stake in the Chinese internet giant.   

READ: Tencent has biggest drop in almost a year

Some investors said Naspers could lose steam because Tencent, which accounted for the bulk of its recent half-year earnings, was overvalued.

"You'll need a lot of growth from Tencent to justify (the) Naspers valuation," said Victor von Reiche, senior investment analyst at Cannon Asset Managers.

"We don't think there's enough margin for safety, given that Tencent looks overvalued itself."

READ: Naspers' Tencent bet pays off as shares surge

The Resources index was pulled higher by the big double listed shares. Anglo American [JSE:AGL] added 1.61% to R179.85 and BHP Billiton [JSE:BIL] was 1.71% higher at R255.00.

Sasol [JSE:SOL], which gained almost 5% on Monday on a stronger oil price, was 0.31% lower at R443.16.

Anglo American’s two biggest subsidiaries in South Africa, Kumba [JSE:KIO] and Anglo American Platinum [JSE:AMS] (Amplats), are still trading at 52-week lows. Kumba lost another 0.70% of its value to trade at R126.55. This meant the share has now lost almost half of its value since the beginning of the year as it traded at R248.62 as recently as January 12 this year.

Amplats, which was at a 52-week high of R510 in August last year, traded another 1.60% softer at R280.50.


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