The share price of Africa’s largest company by market value, Naspers, fell almost a third on Wednesday morning as its new subsidiary Prosus jumped by a similar amount as it listed on Amsterdam’s Euronext exchange.

Prosus jumped 29% on the Euronext at its open, Bloomberg reported, while Naspers fell 31.57% to R2,401.99 as of 9.30am.

Prosus includes Naspers’s prized stake in Chinese tech giant Tencent, and several businesses in industries such as online food delivery and advertising.

Naspers opted to list Prosus, in which it holds a 73% stake, to ease its dominance on the JSE, and hopes it will help to address the continued trading of its share price at a discount.

The decline in the share price of Naspers on Wednesday entailed a discount to implied net asset value (NAV) of about 37%, said IG market analyst Shaun Murison. With the share price of Prosus trading at R1,200 — 30% higher than its suggested placement price of R950 — the unit had implied discount to NAV of 15%.

“Investment holding companies do generally trade at discounts to NAV, although investors will now need to ascertain whether the local asset holdings of Naspers warrants the much deeper discount to NAV than what is evident in Prosus,” Murison said.

In a research note sent by Anchor Capital, senior analyst Mike Gresty said Naspers’s size on the JSE has increasingly become a binding constraint over the past two to three years, its discount to NAV widening to 35%-45%.

Many local institutional investors have capped their Naspers holdings at 10%.

“Our main concern is that, once all of the initial rebalancing noise is out of the way, Naspers’s market cap will still be too big for the SA market, making local investors forced sellers whenever Naspers outperforms the broader market,” Gresty said.

“This is because local institutional investors will continue to be limited by the cap on maximum exposure they can hold in a single stock in their funds.”


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