Picture:ANDREW HARRER/BLOOMBERG
Picture:ANDREW HARRER/BLOOMBERG

US President Donald Trump’s anti-China exertions may seem a world away but, unfortunately, they will likely have an effect on every single SA pensioner or investor, simply because of the importance of Naspers to our local market.

If you haven’t been following the news, the US last week aimed at Chinese tech champion Tencent, of which Naspers owns 31% and to which the SA company owes its incredible stock market success of the past 19 years. Essentially, the Trump administration announced it would bar “people and property within US jurisdictions” from carrying out “transactions” with WeChat and TikTok – two Chinese-owned apps – after 45 days. Naspers immediately felt the heat, its stock falling 4,1% on the JSE last Friday before recovering part of that.

Quite how concerned we should be is still unclear, since, like most things Trump, it’s all a bit of a muddle.

The White House hasn’t actually said what those transactions may be, and in this story, the Financial Times argues that “banning WeChat, an app that is central to the lives of a billion Chinese users, would have a heavy impact not just on China’s second most valuable tech company, but also on swathes of US companies”.

It’s a delicate gamble, and it may all be over in a few months anyway if the election in November swings against Trump. But in the meantime, Trumpian Sinophobia may have a bearing on SA’s most valuable company. Or not – if the market chooses instead to focus on Tencent’s results.

Tencent’s latest numbers (for the three months to the end of June), out yesterday, were, quite simply, spectacular. The company, whose tentacles are basically in every facet of Chinese life, from messaging and mobile payments to gaming, beat expectations by clocking up ¥114.8bn ($16.5bn) in sales, a 29% rise year on year. Its profit came to ¥33.1bn ($4.7bn) – a 37% year-on-year rise.

In fact, Bloomberg argues here that Trump’s ban is unlikely to harm Tencent’s business within China, where, of course, it is most dominant.

Which is good news – even if it’s unclear right now how this will play out, and just how much of a threat Trump’s ban presents to your pension savings.

The trouble ahead for gold

In the meantime, if you’re thinking of other places to invest, our colleague Joan Muller has written about the potential for health-care-focused property stocks in this week’s FM. On this topic, the Financial Times has a great article about how warehouse property is again booming, thanks to the push to online shopping due to the pandemic.

Lastly, as gold fell back below $2,000 an ounce this week after a thumping 27% rise this year, Mohamed el Erian, renowned for his circumspection about market flights of fancy, gives his take in this fine article on why the yellow metal’s rise as a “must-have asset” means trouble ahead.

Many SA investors will have their fingers crossed that gold doesn’t retreat much further, since its upward march this year has fuelled gains in stocks like AngloGold Ashanti and Gold Fields. With Naspers under pressure, the rise in commodity stocks has been one of the few things holding up the JSE in 2020.

*Talevi is the FM's Money & Investing editor.

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