JSE gains as Naspers rockets after Tencent numbers surprise
The JSE closed firmer on Wednesday, recording its best one-day rise in almost three weeks, as Naspers jumped on news out of China, and retailers reacted positively to the latest retail sales data.
Industrials and banks led the gains, with miners firming on Anglo American, despite a stronger rand and dollar, but platinum and gold stocks retreated.
Naspers rocketed more than 6% at one stage, even though Tencent closed a little lower on the Hang Seng, ahead of the release of its results. Naspers owns 31.2% of Tencent, and the latter remains the main driver of Naspers’s market cap. Tencent accounts for about 80% of Naspers’s overall profits.
Tencent’s quarterly update surprised the market, beating consensus forecasts, on an upbeat performance from its game-downloading and WeChat services. Tencent’s revenues totaled 73.53-billion yuan ($11.5bn) from a consensus 71.04-billion yuan, up an annual 48%, while net profit came in at 23.29-billion yuan compared to an estimate of 17.5-billion yuan, an annual rise of 61%.
Operating margins, which were expected to fall, rose to 42% from 39% previously.
Locally, retailers were in demand following the release of retail sales data for March, which accelerated to 4.8%, beating the consensus of 4.4%.
The strong numbers were partly overshadowed by Statistics SA reporting on Wednesday that retail would contribute a 1.3% decline to SA’s first-quarter GDP. It previously reported that GDP suffered a 1.7% subtraction from manufacturing sales and 2.5% from mining sales. However, FNB analyst Jason Muscat said it was not uncommon for first-quarter GDP to contract given the high base set in the final quarter.
The Dow was flat at the JSE’s close, as European markets rose marginally on lower-than-expected inflation data.
Analysts at SEI Investments said they suspected the bull market in US equities was somewhere near the beginning of the end. Fundamental, technical and psychological factors driving equity-market performance appear consistent with the latter stages of an up cycle, they said.
The all share closed 1.26% higher at 58,621.80 points and the top 40 added 1.51%. Industrials rose 2.02%, banks 1.55%, resources and general retailers both 0.77%, and food and drug retailers 0.69%. The gold index shed 2.35%, platinum 2.06% and property 0.43%.
Anglo American closed 2.93% up at R317.19. British American Tobacco lost 0.73% to R646.01. Standard Bank added 1.86% to R210.73.
Transaction Capital rose 1.57% to R17.50. Core headline earnings rose 22% to R310m in the six months to end-March, with the SA Taxi and Transaction Capital Risk Services divisions accounting for the bulk of the earnings.
Naspers rose 5.16% to R3,260.
The top 40 Alsi futures index rose 1.42% to 52,450 points. The number of contracts traded was 25,127 from Tuesday’s 21,930.