South Africa’s main stock index halts a four-day rally, falls 1.3 percent, as index heavyweight Naspers drops 4.4 percent. Photo: File
South Africa’s main stock index halts a four-day rally, falls 1.3 percent, as index heavyweight Naspers drops 4.4 percent. Photo: File

SA stocks plunge as Tencent fall hits Naspers and Prosus

By Bloomberg Time of article published Aug 7, 2020

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By Adelaide Changole

JOHANNESBURG - South Africa’s main stock index halts a four-day rally, falls 1.3 percent by 9:15am in Johannesburg, as index heavyweight Naspers drops 4.4 percent after US President Donald Trump signed a pair of executive orders prohibiting US residents from doing business with the Chinese-owned TikTok and WeChat apps beginning 45 days from now, citing the national security risk of leaving Americans’ personal data exposed.

Naspers holds a 31 percent stake in WeChat’s owner, Tencent Holdings, which plunged as much as 10 percent in Hong Kong. Naspers subsidiary Prosus NV, which holds the company’s stake in Tencent, retreated 5.4 percent.

“This directly impacts Naspers and Prosus via Tencent and similarly will dampen sentiment on tech,” says Casparus Treurnicht, a fund manager at Gryphon Asset Management in Cape Town. As Naspers and Prosus make up more than 20 percent of the benchmark index, “one should be worried.”

The fresh US-China turmoil threatens to derail this week’s rally in global shares. Better-than-forecast earnings and optimism on a coronavirus vaccine had helped lift a gauge of world equities to little changed for the year. Friday weakness trims the FTSE/JSE Africa all share’s weekly gains to 2.2 percent, still set for a second consecutive week of advances.

  • Gold and platinum stocks lead the gauge for mining firms lower for the second day, down 0.6 percent.
  • AngloGold Ashanti -2.5 percent after the company’s first-half profit more than tripled as it reaped a windfall from this year’s surge in gold prices.
  • Gold Fields -2.5 percent, Sibanye Stillwater -1.4 percent, Impala Platinum Holdings -1 percent, Anglo American -0.3 percent, Anglo American platinum -0.8 percent, Northam Platinum -1.1 percent.
  • Richemont falls 0.5 percent after vote on conditional share capital increase. British American Tobacco -1 percent.
  • Foreigners turn net buyers of South African stocks Thursday, purchasing R69m worth of shares, according to index operator JSE.

BLOOMBERG

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