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Naspers lift gives JSE a boost

Johannesburg - Naspers [JSE:NPN] closely followed the share price of the Chinese internet giant Tencent on Wednesday for the second day in a row, illustrating once again the close ties between the two. The South African media giant owns a 34.4% stake in Tencent.

Naspers has recovered some of the losses it suffered on Tuesday after Tencent also made a turnaround in Hong Kong. At mid-morning the stock was 1.13% higher at R2 516.00 and Tencent 0.67% up to HK$271.00 on the Hong Kong Stock Exchange.

Naspers shed more than 4% on Tuesday, in response to news that Tencent lost more than $15bn of its value in hectic trading in Hong Kong.

READ: Honour of Kings slam sees Tencent, Naspers shares fall

The result was that the Industrial index, in which Naspers is by far the biggest share, at mid-morning was 0.38% stronger after losing more than 1% on Tuesday. Naspers shares worth more than R711m were traded on Wednesday.

That helped to pull the overall market higher and the All-share index at mid-morning was 0.38% stronger at 52 246 points, with the Top 40 index 0.46% up to 46 031 points.

The Resources index gained 1.04%, with some of the big resources conglomerates among the busiest shares on the JSE in line with their counterparts on European markets, where optimism in the European economy is on the increase. These stocks have made a strong comeback over the past seven days.

The Financial index was unchanged.

Tencent’s sharp decline on Tuesday was ascribed to various reasons, including huge profit-taking in the technology sector after major indices in Hong Kong failed to hold above important support levels.

Investors were also concerned about heavy-handed criticism from the Communist Party mouthpiece People’s Daily, which slammed the company’s hugely popular online game Honour of Kings as “poison” to young people.

Markets in Asia are also nervous about tensions on the Korean peninsula after North Korea fired a missile that landed in Japanese waters, deepening concerns over the isolated nation's nuclear capabilities.

There was however no reason for Naspers’ decline other than its strong ties with Tencent. Investors have recently voiced concern about its dependence on Tencent, as the value of its Tencent stake is already billions of rand more than the value of the Naspers group as a whole, which means the rest of the group’s interest is valued at nothing.

Naspers is now more than 10% lower than the all-time high of R2 804.50 reached in May this year, and some analysts think it presents a good buying opportunity.

BHP [JSE:BIL] and Glencore [JSE:GLN] have been among the busiest shares on the JSE on Wednesday, with BHP shares worth more than R161m being traded. At mid-morning BHP was 2.03% stronger at R214.78 after gaining more than 13% over the previous seven days. Glencore, which lifted more than 14% over the same period, added 2.39% to R53.14.

Anglo American [JSE:AGL] was more subdued on Wednesday and traded only 0.86% higher at R187.45, but the share gained almost 15% over the previous seven days.

Sasol [JSE:SOL], which is also on the recovery trail, added more than 4% over the past week by gaining 0.56% to R376.60.

In the financial sector there was busy trade in Sanlam shares with more than 1.3 million sold for more than R92m, but the stock gained only 0.27% to R66.43.

The two busiest banking shares both fell. Barclays Africa [JSE:BGA] traded 0.40% lower at R143.84 and FirstRand lost 0.46% to R48.13. Banking shares have been drifting lower and Barclays Africa is now almost 15% lower than six months ago, and FirstRand almost 10% down.

Standard Bank [JSE:SBK], which lost only 2.88% over that period, traded 0.06% higher at R1466.14.

Fin24's parent company Media24 is part of the Naspers Group.


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