Naspers: Tencent’s slump worries investors

Naspers needs to convince investors it will grow profit if South Africa’s second-worst performing stock this month is to curb a slide led by its stake in a Chinese company. Africa’s largest media company, which owns 34 percent of China’s biggest internet company. Tencent Holdings, has declined 9.5 percent this month, making it the worst performer on the 42-member Top40 index this month after Kumba Iron Ore. The blue chip gauge gained 0.4 percent over the same period. “It’s just Tencent,” Kevin Mattison, an equity analyst at Avior Research with a neutral recommendation on the stock, said on Wednesday. “You must remember that the stock had a phenomenal run for many years and if you go and look at the movement in Tencent, it explains most of Naspers’ movement in rand terms over the last month.” Tencent, which trades in Hong Kong, slumped 16 percent this month as the company missed fourth-quarter profit estimates. Naspers trades at 65 times historic earnings, making it the Top40’s third-most expensive stock. Its shares fell 3.32 percent to close at R1 135.99 yesterday. – Bloomberg