By downloading this PDF you agree to subscribe to The Africa Report Daily newsletter, ‘The greed that sometimes drives capitalism must be tamed’ – James Mwangi, AfCFTA key in driving auto sector investment momentum on the continent – Nissan boss, Africa: Siemens Energy on mission to tackle renewable energy, South Africa: Total finds new ‘significant’ gas deposit offshore. © Reuters News & Media Ltd 2020. So why is the market only willing to pay R3 026 for Naspers stocks? Prosus shares fell around 3% at 1406 GMT on Jan. 22, while Naspers shares were up 0.6%. DON'T MISS : Talking Africa New Podcast – As #EndSARS escalates, Nigerians ask: who's in charge, By David Whitehouse Most of these are still loss-making, according to annual results posted Friday. The value as of 11:28 a.m. in Amsterdam was 121 billion euros, making it the third-largest publicly traded company in the Netherlands, behind Royal Dutch Shell Plc and Unilever NV.

Management is rightfully saying it would be unwise to use short-term tactics to force the discount lower if this would destroy long-term shareholder value.

Following this, Naspers agreed not to sell any further Tencent shares over the next three years.

The small but steady dilution will continue. The decision around index inclusion is usually in September, but can happen earlier if one an existing Euro Stoxx 50 member disappears through corporate action. That’s is 81% versus Naspers on 51%. The negative difference between the see-through-value of the Tencent stake and the Naspers market cap is R590 billion or $44,3 billion. Therefore, Naspers holds an effective 22% of Tencent (72% x 31%). SA investors being forced sellers of Naspers might explain why the discount has widened recently for Naspers, but what we find interesting is that Prosus has seen a similar widening in its discount and does not have the same problem. The sheer size of the Naspers stake in Tencent would make it almost impossible for Naspers to sell its holding in the Chinese company at the listed market price in one go. The move to Euronext is “to facilitate our next phase of growth,” Van Dijk said in an interview with Bloomberg TV just after the market opened. Why is the global internet and media group currently trading at such a hefty discount to the value of its stake in Tencent – as well as its total assets? If any banker was going to have an epiphany about capitalism during the pandemic, it was James Mwangi. Van Dijk’s next challenge will be to generate higher returns from those investments and prove that Prosus isn’t merely a proxy for holding Tencent stock. Management must be doing a great job at the coal face to influence such price movement. The finds could help fuel gas-fired power plants, and help a transition away from coal. Again, Tencent has done all the heavy lifting and more besides. Investors “do not have a great desire to get involved with the Naspers venture capital fund”, Mark Artherton, CEO and head of research at Inteqres in London, told The Africa Report. Market commentators may disagree, but the Naspers track record speaks for itself. Naspers Chairman and former CEO Koos Bekker is still quoted on his ‘spaghetti’ comment of a few years ago on his company’s investment strategy. As the graph below shows, the total assets of Naspers are valued in excess of R5 400 per share. There is ongoing cash burn from the developmental assets, which have detracted from value and show little signs of contributing as yet. As I have pointed out previously, risk in the share price on a relative basis has possibly subsided because of this derating. Posted on Wednesday, 19 February 2020 11:45. Shareholders opted instead to back the board’s recommendation and go with the offer from Takeaway.com. Its market value rivals that of Europe’s biggest tech company, Germany’s SAP SE.

Naspers as a holding company has by no means participated in this ‘earnings per share game’ of traditional conglomerates.

46315. This website uses cookies to ensure you get the best experience on our website. Excluding Tencent, Naspers management has achieved a 23% per annum internal rate of return in US dollars on its capital invested in internet assets to date. Bob van Dijk, CEO of e-commerce group Naspers, gestures during a media briefing in Johannesburg, South Africa, October 9, 2019. The discount of Naspers versus the value of its assets is close to an all-time high.

Before it's here, it's on the Bloomberg Terminal. We have updated our Terms of Use. Naspers Ltd.’s newly listed internet unit received an enthusiastic early response from investors, soaring on its trading debut to close a valuation discount to its biggest investment, Chinese tech giant Tencent Holdings Ltd. Prosus NV, as the new Amsterdam-listed company is known, jumped as much as 32% in early trading to value the business at about 125 billion euros ($138 billion). To put that in perspective, the share price of Naspers would have to be 46% higher than it is just to be at parity with what its share of Tencent is – and that ignores all its other assets and investments. Investors with direct access to Tencent shares who are convinced by the investment case should “buy Tencent directly”, he says. In the prior year, Naspers held 33,5% of Tencent and now holds 33,3%.

Exchange control regulations unfortunately complicate moving the group’s primary listing from the JSE, but as a result of its current strong cash position and the fact that the online classifieds group OLX has just turned profitable, other opportunities to unlock the discount have emerged. Please check your email/junk folder for our verification request.

We need you to verify your email address to continue. Not bad you may say, I’d take that sort of performance any day of the week.

When I issued my “Yey or Nay” note on 24 August, the day before Naspers AGM, the stock was priced at R2992. However, despite its investment in Tencent being valued at R4 483 per share, Naspers was at the time of writing trading at R3 026 per share. “The bottom line [...] is no longer a central focus,” he said, during a long video call in late August, in his capacious but empty office in central Nairobi. Want to trade CFD Equities on the most affordable online South African trading platform?



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