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Johannesburg - Chinese internet giant Tencent could soon be the biggest listed company in the world, which would have spectacular results for Naspers, which owns 34.4% of Tencent.
Tencent closed in on the likes of Facebook and Amazon on Tuesday morning, when it became the first Chinese company to breach a market valuation of $500bn. It is now within striking distance of Amazon, which is valued at $544.46bn, and has overtaken Facebook, which is worth $520.14bn.
READ: Tencent overtakes Facebook as market cap hits $531bn
Tencent’s share price gained 2.14% or HK$10 to a new record of HK$430, bringing the total value of the Tencent group to HK$3.99trn or $510.7bn. That means that Naspers’s stake of 34.4% in Tencent jumped to almost $160bn.
As a result, the Naspers [JSE:NPN] share price gained 2.63% on Tuesday to yet another all-time high of R4 100.02, about 100% higher than at the beginning of the year.
With Naspers now representing more than a fifth of the JSE’s market value, it was no surprise that the Industrial index rose 1.22% to a new all-time record of 94 759 points.
This record-breaking index is also the driving force behind the All-share index, which gained 1.01% at mid-morning to a new all-time high of 61 110 points. The Top 40 index was 1.18% higher on a new record of 54 968 points.
Before Tuesday's trade, the Industrial index was already 16.88% up over the past 90 days, which pushed the All-share index 12.88% higher over the same period and lifted the Top 40 index by 14.88%.
There was also more support from other indices on Tuesday as the rand lost some ground to trade at R14.11 to the dollar, as investors are becoming nervous about the cost of debt if South Africa’s credit rating is downgraded later this week as expected
The Financial index lost only 0.11%, but the resources sector was 1.71% higher as commodity companies earn their income in dollar.
But the talk of the market was Tencent’s spectacular growth since it went public in Hong Kong in 2004 at HK$3.70 per share. Since then, it has rallied 11 251%. Tencent's stock this year alone is up 121.4%.
The share price has been driven by Tencent's continued revenue growth, massive user base and investments into new areas. Last week, the Chinese company reported a 67% year-on-year rise in net profit for the third quarter, beating market expectations.
One of its key products is China's most popular messaging service, WeChat, which is now approaching 1 billion users.
The big shares in the Industrial index were all higher, supported by the weaker rand. British American Tobacco [JSE:BTI] was 1.15% higher at R934.67, only about 1% lower than the 52-week high of R944.13.
Richemont [JSE:CFR] traded 0.43% stronger at R123.81 and Anheuser-Busch InBev [JSE:ANH] gained 0.32% to R1 620.50. Sasol [JSE:SOL] gained 1.61% to R425.92.
Kumba Iron Ore's [JSE:KIO] spectacular growth story continued, as the share closed at R300 on Monday - 3.2% higher on a new 52-week high of R309.60. At the beginning of last year, Kumba was as low as R26.40; it is now almost 90% higher.
Although there is an oversupply of iron ore on the global markets, Kumba’s quality ore with a high iron content is in big demand, as Chinese steel producers are under pressure to clean up the environment and high quality ore cleans up their emissions.
Kumba’s holding company, Anglo American [JSE:AGL], was 1.99% higher at R272.13 and BHP [JSE:BIL] traded 1.96% stronger at R256.09.
