As can be seen from Figure 1 , these discounts to NAV have gone pretty much one way since Prosus listed on 11 September 2019. Prosus share price leapt to R1 650 on Friday, while Naspers shares also gained more than 4 percent to R3 171.
“The underlying issues surrounding the discount given by the market to Naspers were not eliminated or reduced by the listing of Prosus,” according to Atherton. All rights reserved. After completing the CAPTCHA below, you will immediately regain access to www.streetinsider.com.
© 2020 Independent Online and affiliated companies. The Prosus discount to NAV was 33.3%. Investors with direct access to Tencent shares who are convinced by the investment case should “buy Tencent directly”, he says. Naspers's Prosus eyes $5bn share buyback plan. (Index Futures/Index Options/JGB Future) October 2020 Contracts Nikkei 225 23,724.23 yen Nikkei 225 Weekly Options 1st week, Oct. 27, 2020OSE Final Settlement Prices Updated (Contract month: October 2020): Gold, Platinum, Oct. 23, 2020OSE Special Quotations Updated (Contract month: 4th week October 2020): Nikkei 225, Oct. 22, 2020OSE Replacement of Component Issues for the Nikkei Stock Average(Nikkei 225), Market News Oct. 22, 2020 OSEReplacement of Component Issues for the Nikkei Stock Average(Nikkei 225) Tweet Nikkei Inc. announced the following partial change of component, Oct. 16, 2020OSE Special Quotations Updated (Contract month: 3rd week October 2020): Nikkei 225, Oct. 21, 2020OSE Special Quotations Updated (Contract month: October 2020): TAIEX, Global shares mixed amid virus spike, US aid concerns, 1 of 5 A man stands near an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Friday, Oct. 16, 2020. Figure 2: Naspers’ historic discount to NAV since Prosus listing announcement: Source: Bloomberg, Anchor. In the absence of a big correction in the Tencent share price though, the commitments that Prosus management have made to take further steps to address this discount in the medium term suggest that we are at levels from which there should be good upside if management does indeed follow through. Final Settlement Prices Special Quotations, etc. He said they believed this was a step in the right direction, although the board would still need to take a lot more steps to really unwind the discount sustainably. Prosus' NAV discount has widened considerably since its spinoff from Naspers. “Reducing the discount to NAV has been something that management has been working on for a few years now, and is the reason for the existence of Prosus in the first place. In total, up to $5 billion in shares in Naspers and Prosus will be purchased on the open market on a pro-rata (72.5%/27.5%) basis in line with the economic stakes of both companies in the Prosus/Naspers asset base. What type of discount is the market implying for Prosus and Naspers post the Prosus listing? The million-dollar question currently is at what discount to NAV the two listed vehicles (Naspers and Prosus) will trade at in the future. Opinion on the ultimate profitability of the food delivery vertical is very divided (Prosus management’s extreme bullishness notwithstanding!). An investment in Naspers removes that control,” he says. The announcement follows earlier actions such as the unbundling of MultiChoice Group and the listing of Prosus on Euronext Amsterdam last year. “A significant share price move at Tencent could easily offset the benefits of this $5bn proposed share buyback, so it is important to consider all the moving parts when investing based on a corporate event such as this one,” Takaendesa said. Prosus intends not to vote the Naspers shares acquired. DURBAN - PROSUS shares rose more than 5 percent on the JSE on Friday after the Dutch technology giant said it intended to buy back up to $5 billion (about R81bn) in its own and Naspers’ shares, in an effort to reduce the discount between the companies’ share prices and their underlying assets.
Underlying assets have significant growth potential. The decision around index inclusion is usually in September, but can happen earlier if one an existing Euro Stoxx 50 member disappears through corporate action. “By extension, the management are saying that they think the market is undervaluing the internet assets that Naspers owns. “On balance, the proposed buyback of Naspers and Prosus shares is largely positive. Short-term progress in increasing insurance penetration in Africa will be a victim of pressure from the “Big Six” global reinsurers to increase prices, says Ryan Phillips, chief operating office at Afro-Asian Insurance Services. Peter Takaendesa, the head of equities at Mergence Investment Managers, said the wider discounts at which Naspers (more than 50 percent) and Prosus were trading compared with the market value of their underlying investments and high valuations of assets in markets they had been looking for acquisitions made share buybacks more attractive than pursuing acquisitive growth. Prosus, unbundled from Naspers last year, also owns a 31 percent stake in Tencent. The Prosus ordinary shares N proposed to be issued in connection with the Prosus distribution have not been and will not be registered under the U.S. Securities Act of 1933, as amended.
We build leading companies that empower people and enrich communities See all our companies. The discussions around holding companies or conglomerates often focuses on the market discount to the Net Asset Value (NAV) of the underlying businesses, often referred to as the conglomerate discount. If you are interested in www.streetinsider.com content, APIs are available.
Basil Sgourdos, CFO of Prosus and Naspers, comments: “Over the years, our group has achieved improved financial flexibility. It’s hard to apply much from a fundamental perspective to predict where this discount should be and hence where it goes from here. MultiChoice Group and the listing of Prosus on Euronext Amsterdam last year. By downloading this PDF you agree to subscribe to The Africa Report Daily newsletter. Discount to net asset value is a pricing situation that occurs when an ETF's or mutual fund’s market trading price is lower than its daily net asset value (NAV). Prosus, he argues, is simply Naspers by another name. Prosus CEO Bob van Dijk said the company had looked at other options, including spending money on new large acquisitions but found buying back its own shares a better deal, pointing to the discount. DURBAN - PROSUS shares rose more than 5 percent on the JSE on Friday after the Dutch technology giant said it intended to buy back up to $5 billion (about R81bn) in its own and Naspers’ shares, in an effort to reduce the discount between the companies’ share prices and their underlying assets. With Nigeria's debt market becoming even more unattractive to foreign investors, Nigerian investors’ only viable trading option will be the country’s now bullish stock market. COPYRIGHT (C) 2020 ANCHOR GROUP LIMITED | Reg #2009/005413/06 | Vat #4380267833 The board of directors of Prosus (the Prosus Board) is of the view that the Proposed Transaction is a timely investment in the group’s strong internet portfolio, which is a sensible use of capital given full market valuations in consumer internet M&A, and the sizeable discount to the group’s NAV.
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