Naspers, Prosus and JSE rebound strongly

The share price of both tech giants surged 19% by midday, leading the JSE more than 3% higher.
Image: Moneyweb

A few hours can make a huge difference. Trading screens were red when markets closed on Tuesday, with barely a green figure in sight, but rebounded quickly on Wednesday morning with the JSE jumping just over 3% when the market opened.

The strong recovery came as the share prices of Naspers and Prosus surged sharply to recover all the losses of the last few days. By midday on Wednesday, both tech stocks rebounded some 19%.

Naspers and Prosus share price

The market plunged earlier in the week when Prosus and Naspers fell hard on news of the latest crackdown by the Chinese government on technology firms – in particular, that it will issue Tencent with a huge fine after alleging that the firm violated anti-money laundering rules.

Read:
JSE plunges below 70 000 points on Naspers/Prosus fallout
Tencent dives on report of record fine for money-laundering
Tencent, Alibaba have erased $1trn in value over last year

Naspers and Prosus the two largest firms in the main indices on the JSE.

The JSE All Share Index was nearly 3.4% higher just before lunch and the industrial index 6.2% stronger.

JSE Alsi share price

The insurance sector’s index also increased, by more than 4%, to belatedly reflect the recent good results from insurance companies, announced during the market turmoil.

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Global stock markets up

Stock markets improved worldwide with global financial data supplier Bloomberg attributing the strength to an announcement from China that it will act to stabilise markets. “This lifted sentiment after weeks of worries about war and high inflation,” it said.

Read: China stocks jump most since 2008, as state council vows support

“China vowed policies to boost financial markets and spur economic growth as it attempted to ease fears over challenges related to the ailing property sector, overseas listings and a clampdown on internet firms.

“Equities in China and Hong Kong had been under pressure – shedding about $1.5 trillion over the first two days this week – in part on speculation that Beijing’s ties with Russia raise the risk of a US backlash,” Bloomberg reported.

Prosus jumped 20% in Europe with other technology stocks following the largest consumer internet group higher.

Prosus recovered from Tuesday’s historic low of R718 – even lower than during the Covid-19 crash in March 2020 – to R844. However, this is still far below its peak of R1 937 reached during February 2021.

Naspers jumped from Tuesday’s close of R1 493 to R1 742 barely 18 hours later, but it is also still way below its peak.

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