Aspen leaps after receiving offers
Aspen Pharmacare shrugged off Thursday’s broad market slump after receiving unsolicited offers for parts of its business while Naspers and Prosus led the JSE sharply lower amid another regulatory crackdown on China’s technology sector.
Aspen, SA’s largest pharmaceutical group by market capitalisation, rose the most in four months on Thursday after saying it received two offers to buy parts of its global active pharmaceutical ingredients (API), which manufacturers the active ingredients used in medication.
API generated R6.4bn of the group’s R37.8bn revenue year in its 2021 financial year to end-June. In a statement on Thursday, the company said it would “embark on a structured process to facilitate offers for all or parts of its API business” before making a decision. Aspen ended the day 6.82% higher at R213.50, the highest close in three years.
Naspers, which owns about 29% of Tencent via its global internet arm, Prosus, fell the most in three weeks after Tencent plunged more than 8% in Hong Kong when Chinese officials told tech companies to “end their focus on profit in gaming”.
Chinese authorities want tech firms to prevent children from becoming addicted to online games and remove “obscene and violent content” and avoid “unhealthy tendencies, such as money-worship and effeminacy”. Since August 3, when markets reacted to Chinese state media describing gaming as “spiritual opium”, the Naspers stable has seen about R300bn of its value wiped out, almost equivalent to the market capitalisation of SA’s most valuable bank, FirstRand. Naspers fell 7.82% to R2,429.36, and Prosus 6.3% to
R1,240.72 — its worst one-day fall in five weeks.
“Foreign investors were delivered another reminder that President Xi Jinping’s crackdown is not over just yet,” said Oanda senior market analyst Edward Moya.
“Investors are running away from investing with any technology companies related to China, and that can’t be good for risk appetite.”
The JSE all share fell the most in three weeks, closing 2.06% lower at 64,176 points, and the top 40 lost 2.29%. Industrials fell 2.65%, banks 1.57% and resources 1.9%.
The rand firmed to a two-month high, reaching an intraday best of R14.0909/$ according to data compiled by Infront. At 6.30pm, it had strengthened 0.27% to R14.1474/$ and 0.11% to R16.7232/€, while it had weakened 0.32% to R19.5961/£. The euro added 0.13% to $1.1831.