Shares in Naspers have declined some 10% over the past two sessions on the JSE, with the\u00a0company\u00a0closing 5% off on Monday, tracking losses in China\u2019s Tencent Holdings.<\/p>\n
The South African e-commerce firm lost R61 or 5% to R1,167, having\u00a0stumbled to a loss of\u00a04.51% on Friday (14 March), and an\u00a0intraday loss of more than\u00a08%,\u00a0its biggest one-day fall in two-and-a-half years.<\/p>\n
On Monday, Tencent, in which Naspers has a 34% holding, lost a further 3.10%, having declined 4.1% on Friday.<\/p>\n
Reuters reported that China’s central bank is considering regulations that would significantly limit the use of third-party payment systems, including the payment arms of Alibaba and Tencent.<\/p>\n
The People’s Bank of China released draft rules last week to major banks for consultation. The measures would ban the payment companies from handling offline transactions.<\/p>\n
They would also heavily limit spending by individuals using third-party payment platforms and transfers from bank accounts to accounts managed by third-party companies, Reuters said.<\/p>\n
Naspers’ return over the past 52 weeks is still a healthy\u00a091.07%, having\u00a0broken through the R1,000 barrier on the local bourse in December 2013.<\/p>\n
Nadim Mohamed, investment analyst & partner at First Avenue Investment Management pointed out that\u00a0Naspers is tracking the movement in Tencent\u2019s stock price very closely as Tencent is the biggest contributor towards its underlying NAV.<\/p>\n
“In my opinion, investors should not be too concerned as Tencent has had a very quick rise from KHD400 in Nov, 2013 to beyond KHD630 recently.”<\/p>\n
“The price has reverted back to HKD545 as the move was overdone. In addition, there were concerns regarding a decision by the People’s Bank of China (PBoC) to suspend mobile payment and credit card services using quick\u00a0response\u00a0(QR) codes which has limited immediate financial impact,”\u00a0Mohamed said.<\/p>\n
“I do not think this will be a permanent ban as the Chinese Govt is generally supportive of innovation and, if the respective security concerns can be addressed, there is a high probability that the ban will be lifted,” the analyst said.<\/p>\n
“I still believe Naspers and Tencent are very will positioned to benefit from the rise in emerging market internet adoption driven by smartphone adoption and mobile data.”<\/p>\n
Paul Theron, CEO of\u00a0financial management service\u00a0Vestact\u00a0also waved away any concerns about the immediate future of Naspers.<\/p>\n
“I would not be too concerned. Companies like Tencent are tricky to value, as their profits are growing so fast. Investors should expect some volatility,” he said.<\/p>\n
Naspers shares plumment on Tencent woes<\/strong><\/a><\/p>\n Analysts weigh up Naspers post-Bekker<\/strong><\/a><\/p>\n Naspers restructures e-commerce business<\/strong><\/a><\/p>\n