Picture: JSE
Picture: JSE

The JSE opened lower on Wednesday as Naspers dragged the overall market down while banks and retailers gained on a firmer rand.

Miners were early losers but retailers and banks were on the up.

Naspers was 2.35% lower at R2,774 in early-morning trade, the weakest level since hitting R2,680 in intraday trade on April 5. It last closed below R2,700 in August 2017.

The market heavyweight is now clearly in a pronounced bear market trend, having lost 20% so far in 2018, as its previously lucrative investment in Chinese internet company Tencent has turned sour.

Tencent, of which Naspers owns about a third, has lost more than $200bn in market value over the past few months and is 40% down from its closing high in January.

Naspers has halved its inflated price-to-earnings level of more than a 100 times a few months ago to a present 53, but the dividend yield remains at about 0.2%, mirroring the company's stingy dividend payments.

The dividend yield usually rises when a share price falls, potentially enticing investors to invest at the lower levels. But this has not been the experience with Naspers up to now, which could indicate the market is expecting further downside.

Tencent tumbled a further 2% in Hong Kong trade, despite the Hang Seng edging up 0.25%. The Nikkei 225 gained 0.16%.

The Dow closed 0.21% weaker on Tuesday.

The rand firmed to R14.5191 to the dollar in early-morning trade, the best level in more than a week on the appointment of Tito Mboweni as finance minister on Tuesday. 

Intellidex analyst Peter Attard Montalto said Mboweni would be a fascinating finance minister "as he is a strong personality". 

Attard Montalto said Mboweni would help re-establish the Treasury at the heart of macro-policy making and spending oversight in government, but warned "that could come at the risk of political complications and upset".

Brent crude was steady at $84.71 a barrel.

At 9.52am the all share was 0.91% lower at 53,695.20 points and the top 40 was 1.04% down. The gold index shed 2.27%, resources 1.34% and industrials 1.27%. General retailers lifted 0.89%, financials 0.22% and banks 0.15%.

Anglo American was 1.2% lower at R322.28.

British American Tobacco dropped 1.29% to R651.37.

Absa was the star performer among banks, climbing 0.83% to R149.85.

Old Mutual plunged 26.31% to R21.70 as the group unbundled the majority of its shareholding in the issued share capital of Nedbank.

Steinhoff International lost 3.83% to R2.26.

Aspen Pharmacare recovered 2.35% to R160.69.

mittnerm@businesslive.co.za

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