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Johannesburg - Naspers [JSE:NPN], which represents more than 12% of the JSE’s market capitalisation, rallied in early trade on Thursday, pushing the Industrial index higher despite a rampant rand.
The optimism however did not last long and by mid-morning negative sentiment on the JSE was pulling share prices lower again, despite strong world markets.
Naspers was almost 2% stronger in early trade at R2 064.93 on the back of a 2.28% jump in the share price of Tencent, the Chinese internet giant listed in Hong Kong in which the media firm holds a stake of 34.4%. Tencent represents by far the biggest part of Naspers’ market value and income.
The rally lost steam later on, and by midday the share was only 0.87% stronger at R2 035.17.
Due to Naspers’ weight in the Industrial index, it rose almost 1% in early trade despite a strong rand. The local unit traded 1.74% stronger at R13.58 to the dollar, in response to the weaker greenback which lost ground to the Chinese yuan amid greater optimism about China's economic prospects. However, by mid-morning the index was in the red again and traded 0.25% softer.
The All-share index was at that stage 0.16% lower at 50 677 points, while the Top 40 index traded 0.16% down at 43 891 points. The resources index gained 0.49% on the back of optimism about the global economy, which favours commodity demand, but the Financial index lost 0.82%.
Tencent’s share price responded to more positive data about the state of the Chinese economy as well as the news that the internet giant is the leading investor in a consortium which invested more than $215m in Mobike, a successful start-up which rents out bicycles to help people navigate China’s urban areas.
Naspers ended 2016 more than 2% lower after it lost more than 8% from its all-time high of R2 530 reached in September last year. The loss in momentum was in line with Tencent's share price which has tumbled 13% from its September record, wiping $35bn off the value of its stocks. The company’s large weighting on the Hang Seng index at 10% helped make Hong Kong’s benchmark stock gauge one of the world’s worst performers last quarter.
Analysts however now think the Chinese economy is entering the new year with more momentum than a while ago. After upbeat data about the country's manufacturing sector, a private sector survey showed that growth in China's services sector accelerated to a 17-month high in December.
Asian stocks climbed for an eighth consecutive day on Thursday, buoyed by further gains on Wall Street and an overnight bounce in oil prices that bolstered energy and resources shares.
Positive news about the Chinese economy is particularly good news for resources. Anglo American [JSE:AGL] was 0.57% stronger at R192.58 and BHP Billiton [JSE:BIL] gained 0.94% to R221.57. Impala Platinum [JSE:IMP] continued its strong run of late which saw the share price jump 8.65% over the previous seven days, and traded 1.89% stronger at R45.94.
Barloworld [JSE:BAW], which gained 34.9% over the previous 30 days and reached a 52-day high of R119.79 last month, was the busiest share on the JSE. The stock was however 0.20% lower at mid-morning on R117.75. Steinhoff [JSE:SHF] lost 48% to R69.25.
MTN [JSE:MTN] was also 1.31% softer at R131.13, and Vodacom lost 0.74% to R150.95.
*Fin24's parent company Media24 is part of the Naspers Group.
