NASPERS

Share price: R1 823,07 JSE code: NPN

SELL MEDIA GIANT NASPERS IS ONE OF THE largest and most popular shares on the JSE. Most institutional investors hold the share. But IM thinks it’s time to exit.

Naspers’ share price is something of an anomaly. It closely tracks its China-based investment, Tencent, in which it holds 34%. Tencent is a good business, the largest online firm in China, and was an inspired buy by Naspers. But the future is not looking too rosy.

It’s also peculiar that Naspers’s share price should mirror just one of its many investments in pay-TV, other internet companies and print media. The problem for analysts is you are not quite sure what the share price is showing you — Naspers or only Tencent.

Though Tencent operates all over the world, it is based in China. And the Chinese economy is not looking that great at the moment, with GDP growth heading for its lowest level in 25 years. Over the first quarter of the year GDP was 7% — low by China’s historical average. And that’s despite three rate cuts in the past six months by the People’s Bank of China.

This must affect Tencent. People will be reluctant to spend money on things like mobile games when the economy is tightening.

There’s also a question over Naspers’s other interests, like DStv. Subscriber growth in SA has flattened, and do people in Nigeria and Kenya really want to buy a pay-TV service?

The share price, up 61% in the past year, has run too hard. It’s time to get out.