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Johannesburg - The Naspers [JSE:NPN] share price shot through the roof in initial trade on the JSE on Monday, before some profit-taking brought the stock back to more realistic levels.
READ: Naspers bursts through R2 000-mark
The share, which closed at a new record of R1 944.99 on Friday morning, opened above R2 000.00 on Monday morning and within 40 minutes traded at a high of no less than R2 029, more than 5% higher than Friday.
That gave investors an opportunity to take profits and the share price decreased over the rest of the morning, but by midday at R2 000.00 it was still 2.83% higher than Friday’s close and at yet another record level.
This meant that Naspers’ share price has improved by about a third this year, as it started 2015 at R1 515 a share.
And because Naspers makes up about 12% of the Industrial index, these spectacular gains have pushed the index to yet another record of 68 772, 1.02% higher than Friday when it closed above 68 000 for the first time.
This means that the Industrial index gained about 9% so far this year, without a stellar performance by the other heavyweights in the sector.
The All-share index was also 0.56% up at another high of 53 666, after surging to 53 721 when the Naspers share price went through the roof in early trade. The Top 40-index was also at a new intraday high of 47 377, beating the previous high of 47 236 set on March 5 this year.
Hoever, all this action has nothing to do with the South African economy but with happenings in China.
Investors from mainland China continued to pour into the Hong Kong stock market after more disappointing economic news fuelled hopes that Chinese authorities would announce further measures to stimulate the economy. This comes after the Chinese customs administration said imports and exports sank in March.
READ: Shock fall in China's March exports
Chinese investors, who pushed the stock market in Shangai to a seven-year high, are now buying shares in Hong Kong which are perceived to be cheap. One of the shares benefiting most from the rally in Hong Kong is the Chinese internet giant Tencent, in which Naspers owns a controlling stake of 34.4%.
Hong Kong's Hang Seng Index has now climbed more than 13% over the past eight sessions. Tencent was by midday 5.83% higher. The share, which closed at HK$161.80 on Friday, opened at HK$165 and was soon trading at HK$ 170.50.
The activity on the Hong Kong market was spurred by mainland authorities' decision last month to expand the number of fund management firms allowed to buy in Hong Kong.
On the rest of the JSE the Financial index was marginally (0.35%) lower and the Resources index also lost 0.48% due a stronger dollar, which strengthened on the back of the disappointing news about the Chinese economy and strong US data.
Besides the strong dollar, bad news about the Chinese economy is also bad for commodity prices as China is still the biggest buyer of those commodities.
The Gold index was however 1.91% higher, despite the fact that the gold price again dropped to below $1 200 per ounce. One of the heavyweights in the sector, Gold Fields [JSE:GFI], improved by 1.98% to R51.50.
Investors are relieved that Gold Fields is to escape possible strike action, as the group reached a three-year wage agreement with the National Union of Mineworkers, which will increase the wages of the lowest paid workers in the group by 21%.
