COMPANY COMMENT
China gets in more than its two cents’ worth at the JSE
Tencent's plunge took the bourse further into deep waters, showing from which direction it takes its cue nowadays
While there are many other factors at play, the past few trading days have shown once again just how much of an influence China’s Tencent has on the performance of the JSE. Tencent plunged another 6.8% on Thursday, taking its losses since September 21 to 20%. Along with a broader global stock sell-off, that dragged the JSE further into the doldrums, since part-owner Naspers tracks Tencent closely. Despite regulatory challenges hurting its gaming business in China, analysts remain overwhelmingly bullish about Tencent’s prospects. Even today, not one of the 50 analysts tracked by Bloomberg has a sell recommendation on the stock. Momentum Securities’s Francois Strydom said on Thursday Tencent is trading at a five-year low on a one-year forward earnings multiple, meaning that the recent sell-off provides a good entry point into the stock. Strydom stressed that there is more to Tencent than gaming and WeChat. For instance, Tencent’s cloud and artificial intelligence business, which servi...
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