Bloodbath on the JSE

It was a bloodbath on Tuesday for Naspers and Prosus as both entities lost around R225 billion after the US Defence Department placed tech giant Tencent on a blacklist and levied that it worked with the Chinese military.



The accusation by Washington has had a resounding impact on Prosus and Naspers (both are listed on the Johannesburg Stock Exchange (JSE).



According to News24, Naspers stock lost around 10% of its value on Tuesday and Prosus lost around 8.4% in value.



At around 9am on Tuesday, the Naspers share price was trading at around R3 900 and by the close of business the shares were trading at around R3 700.



The Prosus share price was trading at around R680 at 9am on Tuesday and had fallen to around R672 by 10.30am but later recovered to around R680 by the close of trading.



Prosus' shares generally traded at around R740 per share on average before the US announcement.



Impact on the company



Tencent said there will be no commercial impact on the company as it has no commercial undertakings in the US.



Market watcher, Simon Brown, said in an interview that the placing of Tencent on the blacklist was “bad for the stock” but “less so actually for the company” commercially.



“They (Tencent) will also likely take it to court, which will take time. But this takes serious shine off the share price,” he said.



A spokesperson for Tencent said the development was “clearly a mistake” as it was “not a military company” or supplier.



“Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defence to address any misunderstanding,” explained Tencent.