By Alec Hogg
Thanks to its one third ownership of Chinese internet giant Tencent, Naspers is easily the JSE’s most valuable share. So I watched the webcast of yesterday’s inaugural New York investor day. And saw CEO Bob van Dijk deliver a polished performance, comfortably handling questions from Wall Street’s most influential analysts.
Perhaps the most important issue for South Africans was Van Dijk’s explanation why the Naspers share price trades at a 38% discount to the value of the group’s underlying assets. His management team’s main target is to restore the long-term discount range back to a more normal range of 20-25%. But to get there, they’ll need help from the politicians.
Naspers’s CEO told American analysts the discount began widening 20 months ago as global investors started selling South African shares because of growing political turmoil. Since then, he said, there has been a $20bn capital outflow and “Naspers being the JSE’s biggest and most liquid stock, we took a disproportionately high share of that”.
Put differently, in benign political conditions, based on its assets the Naspers share price would now be trading at R4,250 rather than the current R3,500. So a return to normality would add a staggering R350bn to the company’s R1,530bn market capitalisation. Given Naspers’s 20.5% share of the whole JSE, that’s a rather powerful reason for all SA investors to be pulling for #CR17.
