Alec Hogg: Our portfolio’s US tech stocks shoot the lights out

"Apple delivered record profits for the June quarter, boosted by surging iPhone sales - a direct return on its ongoing investment in human ingenuity."
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Rational minds will be praying Cyril Ramaphosa and his misguided ANC pays particular attention to this morning's headlines. If ever there were an advert for the superiority of capitalism over command-and-control collectivism, this is it.

Money is flooding out of China at an unprecedented pace after the penny dropped that Beijing is abandoning Deng Xiaoping's "good cat" experiment with free enterprise which pulled the communist state out of widespread poverty. As a result of Beijing putting its idealogical jackboot back on, the value of China's next generation businesses are plummeting. In stark contrast, the West's tech businesses are flourishing, evidenced by last night's reporting of more record financial results.

China's tech stock rout has serious implications for South African investors. Naspers/Prosus, whose share prices are determined by the value of its Tencent shareholding, is the backbone of the JSE – and many SA retirement portfolios. With Tencent dipping another 3.5% on the Hong Kong market this morning, the stock is now officially into a new bear market having lost over 21% in the last five days. Naspers/Prosus is following it lower, with an additional embarrassment of having spent over $5bn buying back their own shares at prices far above the current level.

___STEADY_PAYWALL___

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