Was Naspers’s sharp retreat on Monday just a blip or the start of a weakening trend? What will be the catalyst for the market heavyweight: a weaker rand for a recovery or a general dip in the market for the downside? It was not clear on Tuesday, as Naspers recovered nearly 2% in intraday trade after falling 6% on the previous day. It is still 27% up for the year.What was notable in Monday’s retraction was that it was more pronounced than the 2.5% fall in its Chinese Tencent investment, of which Naspers owns 34%. Tencent is its most profitable investment and its market driver. This was ascribed partly to the stronger rand on Monday, but it did not make much sense on Tuesday as Naspers recovered in a still firmer-rand environment. Tencent was up only 0.67% in Hong Kong trade. So what is at play with Naspers now? The fact is, Naspers is still grossly overvalued at a price:earnings ratio of 100. That alone could account for investors’ jitters. The real issue is whether the drop was simp...
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