Naspers pulls JSE higher thanks to Tencent

Johannesburg - Naspers [JSE:NPN] pulled the JSE higher on Wednesday as the share price reacted positively to better than expected results from Tencent, the Chinese internet giant in which the South African company owns a stake of 34.4%.

By midday on Wednesday the South African media giant’s shares traded almost 3% higher and it helped to pull the industrial index 1.17% higher.

The All-share-index was at that stage 0.61% higher on 54 264 points and the Top 40-index gained 0.67% to 48 191 points. This was mainly due to the industrial index as nothing exciting happened in the rest of the market.

The resources sector took a breather from its strong run of the past few days and was only 0.14% higher, while the financial index lost 0.31% and the gold index traded 0.17% weaker.

Tencent Holdings' profit rose to a record and beat analyst estimates as Asia’s second-largest internet company boosted sales by adding more smart phone games.

Net income climbed 7% to 6.88bn yuan ($1.1bn) in the three months ended in March. Analysts expected a profit of  6.7 billion yuan.

Tencent is benefiting from investments  in mobile games, online shopping and travel services to compete with Alibaba. The company is also experimenting with selling advertising on its mobile messaging platforms QQ and WeChat, which combined have more than 1 billion registered users.

Naspers was losing ground over the past few days as foreign investors started to turn their attention away from stocks in emerging markets towards the developed world, where a huge selloff in government bonds led to a spike in yields.

The industrial index lost a one stage 3% of its value from the high of 69 888 reached on the 26th April.

Foreigners are very interested in big doubles listed companies with international business interests and if they start to look elsewhere, these shares suffer the most.

The strong pound also benefitted these doubles listed shares listed in London, particularly the ones that report their results in pound, as it means that South African investors will earn more on their investment.

On Tuesday afternoon the rand reached a new low against the pound of R19.05, but on Wednesday morning a pound traded for R18.72.

One such a company is British American Tobacco [JSE:BTI] which traded 0.59% higher on R676.50. At one stage the share price was almost 1% higher on R679.25.

Mondi [JSE:MND] gained a massive 9.86% to R269.00 after Standard & Poor’s (S&P) upgraded its long term credit rating.

Andrew King, Mondi’s chief financial officer, said the credit rating was upgraded in recognition of the group’s strong cash flows and profitability from its high quality, low cost and well diversified asset base.

SABMiller [JSE:SAB], which announced decent trading results earlier in the week, gained 1.10% to R671.9. The share is now 3.27% higher over the past seven days and more than 10% for the year so far.

Sasol [JSE:SOL] benefitted from an upward spike in the oil price and the share traded 2.66% higher on R472.55. The oil price benefitted from a strong dollar, which make crude cheaper for buyers using strong currencies and Brent traded $1.09 higher on $66.33 per barrel.

Amongst the big resources shares Anglo American [JSE:AGL] was 0.31% higher on R212.29 and BHP Billiton [JSE:BIL] gained 0.36% to R295.00.

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