JSE's Naspers-fuelled rally fizzles out

Johannesburg - Naspers [JSE:NPN], one of the biggest shares on the JSE, on Friday morning surged to an all-time high which helped pull the Industrial index higher. It was however not enough to help the overall market, as financial and resources shares were lower by mid-morning after a strong start.

The Naspers share price was, as always, supported by even stronger moves in the share price of Tencent, the biggest internet company in China, which traded 4.5% higher in Hong Kong on the back of good results and corporate activity. Naspers owns 34% of the giant, which operates a social network and online games platform in China.

At mid-morning on Friday Naspers was 2.95% higher at R2 265.00, smashing the previous high of R2 233 set in November last year and at one stage trading as high as R2 280.65. Naspers is more than 20% higher over the past 90 days.

Its weight helped pull the Industrial index 0.50% higher by mid-morning. The All-share index was however only 0.01% up at 53 926 points after gaining more than 0.64% in earlier trade. The Top 40 index was only 0.11% stronger at 47 890 points

The market lost momentum after a strong start, as profit-taking in the financial and resources sectors pushed those indices back into the red. At that stage the Financial index was 0.87% lower and the resources sector had lost 0.42%.   

Tencent’s share price traded at HK$171.20 in Hong Kong, which means the share is very close to a 52-week high of $141.70. It was announced on Friday morning that the group will acquire 5% of Paradox Interactive, one of the biggest producers of online games.

It is also in talks with Softbank to buy the Japanese telecommunications giant's majority stake in Finland's Supercell. Supercell is the developer of some of the world’s most popular online games.

Last week the Chinese group said growth in its gaming and advertising businesses helped revenue rise 43% in the first quarter of 2016, beating analyst estimates.

Analysts said markets worldwide have been tentative on Friday morning as investors wait for comments from Federal Reserve chair Janet Yellen at a Harvard University-sponsored event later on Friday. She is expected to confirm that an interest rate hike is imminent.

Economic growth for the first quarter will be revised on Friday, and next week inflation and employment data will give further clues on when an increase in interest rates can be expected.

The strong rally by the dollar, on the expectations of a rate hike, also took a breather on Friday morning, but this did not do much for commodity prices and resources shares.

Apart from Naspers, the rest of the industrial shares delivered a mixed picture, with various shares losing momentum in morning trade.

Some of the big shares on the JSE at mid-morning were marginally lower after initial gains. Sasol [JSE:SOL] lost 0.15% to $479.99, after the oil price dipped back to below $50 a barrel. Earlier on the stock traded at R482.37.

SABMiller [JSE:SAB] reached its 52-week high of R987.10 in early morning trade; by mid-morning the share was 0.32% softer at R975.55. British American Tobacco [JSE:BTI] was also higher at R987.00, but gave up all those gains by mid-morning to trade 0.25% lower at R976.17.

In the Financial index, FirstRand [JSE:FSR] gave up 2.22% to trade at R43.22, Barclays Africa [JSE:BGA] lost 1.91% to R197.50 and Standard Bank [JSE:SBK] was 1.37% lower. Sanlam [JSE:SLM] was however 1.04% stronger at R64.10.

Platinum shares were lower after the platinum price fell back to below $1 000 per ounce, trading at $992 by mid-morning. Impala Platinum [JSE:IMP] lost 2.75% to R48.15 and Anglo American Platinum [JSE:AMS] traded 1.57% softer at R389.30.

* Fin24 is part of Media24, a subsidiary of Naspers. Naspers has a 34% stake in Tencent.

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