It’s no surprise that Internet and media group Naspers on Friday announced a US$1,2bn (R16bn) deal to become the largest shareholder in Avito, the leading online classifieds platform in Russia, Mof Terreblanche, a director of Stonehage Investment Partners, said on Friday.
He pointed out that Naspers started investing in Avito in 2013 and has now increased its stake from 17,4% to 67,9% on a fully diluted basis.
Naspers shares ended 3,8% stronger at R2 030,62 on Friday, after reaching R2 038,57 earlier in the session, a new 52-week high.
Putting the share surge into perspective, Terreblanche said that over the past 10 days there has been an uptick in global markets in general, “so there is already a positive market tone”.
On top of that, China has decided to cut interest rates. This is normally a positive sign, but it is also a sign that not all is going so well in the Chinese economy, because interest rates had to be cut to keep the economy going.
The R852bn Internet and media giant specifically benefited from the increase in the share price of Tencent, the Chinese Internet giant in which it holds 34,4%.
Tencent, which has a market cap of HK$1,4 trillion, rose by 2% to HK$149,20 on Friday.
Terreblanche described the latest Naspers deal as interesting, as the South African-based company already has a 29% stake in another Russian e-commerce company, Mail.ru.
Avito is not a listed company and Terreblanche reckons Naspers might also be interested to see its real value unlocked should the company decide to do an initial public offering at a later stage.
“In total, I think we do not have to get too excited about the Naspers share price at the moment. It is certainly not a negative that they increased their stake in a company with a good potential, while at the same time also getting a boost from the existing investment in Tencent,” he said.
“Naspers is merely continuing to build its interests in the online world, an area well known to CEO Bob van Dijk. I am not surprised by the latest investment as this is the direction in which the group believes the future lies.”
Van Dijk said on Friday the Russian e-commerce market is expected to grow significantly, with more people gaining online access. “Over time, e-commerce ratios should move in line with other large countries,” he said on the Avito deal. — Fin24
