JSE plunges below 70 000 points on Naspers/Prosus fallout

The slide continued on Africa’s biggest stock exchange on Tuesday, with the bourse closing over 1.7% down following news of Chinese tech giant Tencent facing a record fine.
Naspers saw the biggest share price plunge since 2000 on Monday. Image: Bloomberg

The JSE’s All Share Index (Alsi) plunged below the psychological 70 000 points mark for most of the day on Tuesday. This came in the wake of the Naspers/Prosus fallout, after reports that majority-owned Tencent faces a stiff fine in China over allegations of violating anti-money laundering rules.

Africa’s biggest stock exchange fell around 3% in morning trade, however, it recovered some of the losses to close -1.77% (at 70 628 points).

Naspers and Prosus – the two biggest companies on the bourse had plunged by a further 10%, respectively, in morning trade. The two groups later pared some of the losses to close just over 4% down and 6.14% down on Tuesday, respectively.

This followed the JSE on Monday closing over 2.4% down, at 71 904 points, after Naspers plummeted over 13% and Prosus plunged over 11%.

Naspers and Prosus share price

All three tech stocks saw a major selloff, after the Wall Street Journal (WSJ) reported that Tencent is facing a record fine related to its WeChat Pay platform violating anti-money laundering regulations in China.

Read:
Tencent dives on report of record fine for money-laundering
Tencent, Alibaba have erased $1trn in value over last year

On Monday, the Naspers and Prosus selloff saw billions being wiped off the market caps of both groups, while Tencent’s share plunged over 10% in China.

According to Bloomberg, Naspers’s share price plunge on Monday is the most since 2000.

The group invested in the Chinese tech giant Tencent over two decades ago and “remains the biggest shareholder through Prosus NV” it noted.

Listen: Naspers/Prosus a buying opportunity with discount at almost 60%?

The rout resulted in the JSE Alsi closing at its worst level this year on Monday, taking it below the record high close of 73 709 points at the end of 2021, and significantly lower compared with its 2022 record high of 77 536 points on March 2.

However, Tuesday’s fall saw the bourse reaching a new record low for the year. The bourse broke through the 70 000 points mark in November last year.

Read: JSE breaks through 70 000 points – highest level ever

“South African markets closed in the red yesterday (Monday), dragged down by broad-based losses in technology sector stocks,” Anchor Capital noted in its daily morning commentary on the markets on Tuesday.

JSE Alsi share price

“Naspers plummeted 13.1%, after the People’s Bank of China charged Tencent with a record fine as its WeChat Pay had violated anti-money-laundering rules,” it added.

In its report citing unidentified “people familiar with the matter” – the WSJ said that China’s central bank “found regulatory breaches and lapses during recent inspection of the ubiquitous [WeChat Pay] payments network”.

Listen: Fifi Peters speaks to Makwe Masilela of Makwe Fund Managers about the JSE slump on Monday:

AUTHOR PROFILE

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: