BRIAN KANTOR: Living with risk in uncertain investment times
A share in Naspers or Prosus has become much more risky to hold, and therefore less valuable
SA savers dependent on their pension and retirement plans will have become aware that the actions of the Chinese Communist Party are sometimes more important than the actions or non-actions of the ANC. This is because of their likely large stake in Chinese internet giant Tencent, held through the shares they own in JSE-listed Naspers, and via its controlling stake in Amsterdam and JSE secondarily listed Prosus.
Because of great uncertainty over the policies the Chinese will apply to Tencent, Alibaba, Baidu and their like, a share in either Naspers or Prosus has become much more risky to hold, and therefore less valuable. Shareholders taking on more risk require compensation in the form of higher expected returns, which almost always means a lower entry price...
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