Industrial index hits new high on Naspers rally

(Gianluigi Guercia, AFP)
(Gianluigi Guercia, AFP)

Johannesburg - Naspers [JSE:NPN], by far the biggest share on the JSE, surged ahead again on Monday which helped to pull the Industrial index to a new 52-week high.

The stock was 2% higher at mid-morning to reach yet another all-time high. It hit R2 826.50 on reports that the company is considering the sale of its pay-TV business in Africa, as sluggish economic expansion in key markets stifles growth and viewers switch to cheaper online alternatives.

The share price gained more than 16% over the previous 30 days and more than 30% over the previous 90 days.

Naspers - which represents more than 12% of the JSE’s market value - pulled the Industrial index 0.22% higher to a new 52-week high of 82 656 points, despite the stronger rand which is normally negative for dual-listed shares.

The All-share index was however marginally lower and at mid-morning was 0.05% down at 54 396 points, only 78 points below a 52-week high. The Top 40 index was 0.08% down at 47 926 points.

The stronger rand, which recovered to R13.19 to the dollar, was bad news for resources and gold shares, which lost 1.89% and 0.79% respectively. The Financial index lost 0.27%.

The rand benefited from a weak dollar, which fell to its fell to its lowest levels in six months on Friday against a trade-weighted basket of peers at 97.080, and was trading just a shade above that on Monday.

The dollar was dented by renewed concerns about Donald Trump's presidency, following two new media reports of possible collusion with Russia during his election campaign.

There were almost 2 500 transactions in Naspers, by far the most of the morning, on reports that the group considers various options for its Africa pay-TV businesses. A disposal of MultiChoice won’t include the South African division, which is still highly profitable.

Naspers and MTN [JSE:MTN], Africa’s largest wireless operator, briefly discussed a deal for MultiChoice Africa, but according to sources no agreement was reached. Both companies confirmed last week that they are still in talks about sharing TV content.

MTN’s share price, which has been in the doldrums lately, traded only 0.34% higher at R120.11. It lost more than 3% over the past 30 days and 10% over the past 90 days.

The other heavyweights in the industrial sector, Brish American Tobacco [JSE:BTI] and Richemont [JSE:CFR], were both lower due to the stronger rand. British American Tobacco [JSE:BTI] traded 0.13% softer at R925.25.

Richemont, which lost more than 2.5% over the past week due to disappointing results, shed a further 0.76% to R110.40. The Swiss luxury goods maker bought a 5% stake in Dufry, the world’s largest duty-free retailer.

Richemont chair Johann Rupert envisions a future in which humans are displaced by robots in the workplace, which means people will have more time to travel. He’s betting the company’s money on it.

READ: Rupert's Richemont bets on duty-free

Drug maker Aspen [JSE:APN] traded 1.79% higher at R279.17, but international retailer Steinhoff [JSE:SHF] lost 1.94% to R71.96 after strong gains on Friday on news that the group will list its interest in Africa separately, including Pep Stores and the JD Group. Tiger Brands [JSE:TBS] gained 1.54% to R936.00.

BHP, previously BHP Billiton [JSE:BIL], lost 1.08% to R208.21 and Anglo American [JSE:AGL] traded 0.5% softer at R187.72.

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

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