A SINGULARLY strong performance by media and e-commerce heavyweight Naspers‚ which closed at a record high‚ propped up an otherwise struggling JSE on Friday. Mining stocks led the downside‚ while banks also pulled back.
Subdued global data painted a bleak backdrop but the focus in SA remained on the remarkable rise of Naspers‚ which has benefited from two deals announced over the past two days. A trading statement released in the late afternoon on Friday also boosted the share price‚ as it envisaged interim headline earnings per share (HEPS) climbing between 18% and 24%.
Naspers gained market value of R22bn on Friday and R16bn on Thursday. Altogether 3.9 million shares were traded on Friday.
The immediate catalyst for the Naspers surge was an announcement on Thursday by its Chinese investment associate Tencent‚ of which Naspers owns 34%‚ that a deal had been struck with the Warner Music group to distribute online music in China. It was followed up by news that Naspers has concluded a deal with Singapore Press Holdings and two Norwegian companies to accelerate e-commerce businesses in emerging markets.
Euro area third quarter GDP growth at 0.2% was slightly stronger than expectations‚ but the eurozone recovery remains fragile and subdued‚ Barclays Research said in a note. US retail sales rose 0.3% in October‚ and is expected to only marginally lift annual growth to 2.6% for 2014.
The Dow was down by 0.10% at the JSE close after a strong performance on Thursday. Although Asian markets were stronger on the day‚ European markets were mixed with the UK FTSE 100 flat and the Paris CAC 40 rising 0.26%.
At 5pm the all share index was up 0.02% to 50‚598.02 points‚ with the blue-chip top 40 gaining 0.03%. Industrials firmed 0.69%. Losses were led by platinum‚ which shed 3.60%. Gold lost 1.99% with resources softening 1.58%. Banks closed 0.30% lower with financials down 0.10%.
According to Vestact analyst Sasha Naryshkine, the time has come to re-avaluate Naspers on a sum of the parts valuation rather as an out-and-out earnings company. “Naspers will now be building all sorts of different businesses around the world.”
The market received news about the latest deals favourably and Naspers could be on the verge of replicating successes already achieved‚ in other emerging markets.
The outlook for commodities is less positive‚ which is why miners struggled on the day. A stronger dollar leads to weaker commodity prices. Meanwhile‚ the iron ore and oil markets are more than adequately supplied‚ while demand has softened a little‚ thereby explaining the lower prices.
Mr Naryshkine expects marginal commodity producers to be “caught out badly”‚ but over the longer term the “super cycle” in commodities is by no means finished. “It is however slowing‚” he said.
Naspers at one stage traded 11% higher at a new record level of R1,603.97, but came off somewhat in the late afternoon, though it still ended the day 8.78% higher at R1,555.
SABMiller was a loser among rand-hedges, closing 2.48% lower at R613.99 as the market expressed some concerns on slowing Australian and Asian beer sales.
Among resources Anglo American lost 1.67% to R235.89 with Sasol down 0.94% to R527.01.
Platinum shares reacted to the lower platinum price, with Anglo American Platinum closing 4.47% lower at R352.03. Lonmin was 4.41% down at R30.79.
AngloGold Ashanti lost 3.33% to R96.25 among gold stocks.
Among banking shares Nedbank rose 0.78% to R241.12 and FirstRand closed 0.16% higher at R48.75, but Standard Bank fell 1.09% to R136.89.
Retailers were mixed after a good run this week, with Pick n Pay gaining 1.82% to R57.18, but Shoprite lost 2.59% lower to R166.93.
Investment company Reinet retreated 1.49% to R26.45 after releasing interim results on Thursday that still showed a strong reliance on British American Tobacco in its portfolio. Remgro dropped 1.32% to R253.62.