Not a great start to 2018 for Naspers (NPN)

Category: Financial markets
Date: 16 May 2018 

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In today's blog we take a look at the biggest listed share in terms of value, which is Naspers (NPN), when Naspers sneezes the JSE gets a cold. And so far in 2018, the share price performance of Naspers is not inspiring confidence.

Even though they have been exceptionally successful in recent years, the market is not happy with Naspers' plan to sell a significant chunk of their Tencent Holdings share.

Naspers nose dive continues

The interactive chart below shows the share price performance of Naspers over the last number of years, and as one can see Naspers has seen significant share price growth in recent times, but it has been met with headwinds in recent times.

Percent change:

From the start of 2016, NPN shares have grown by just over 44%, which is far greater than any investment in the money market or bank would have given you. In addition to this, this return far outstrips inflation. So its no surprise investors were exceptionally happy with Naspers. The image below shows the returns of Naspers from the start of 2016 up to 15 May 2018
But towards the end of 2017, news surfaced via the "Gupta leaks" emails that Mulitchoice, a subsidiary of Naspers was involved in some unsavory dealings with the infamous Gupta family who is accused of orchestrating the "state capture" via their puppet, former president Jacob Zuma. For more on the dealing with the Guptas see the following article, To read article click here

In addition to this, Naspers recently announced that they are selling a stake in Tencent, their most successful investment and an investment that saw them benefit tremendously from the gaming boom in China. For more details in the plan from Naspers to sell part of their stake in Tencent read the following article. To read article click here

The chunk in Tencent that Naspers wants to sell will net them around $11billion (or R132billion). That is a eye watering amount of money
And the above mentioned Gupta dealings and the news of their intentions to sell a stake in Tencent has lead to a rather muted share price performance so far in 2018. The image below shows the share price performance of Naspers so far in 2018. For investors who are used to Naspers shooting the lights out, the current share price performance must be a bitter pill to swallow.

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