Podcast: Hello Prosus

In JSE Direct, Latest by Simon Brown

Simon Shares

  • Hello Prosus (JSE code: PRX). Spun out of Nasper (JSE code: NPN) and trading on JSE and Amsterdam Euronext. I expect Prosus to be the better deal as Amsterdam is a larger market for those wanting access to Tencent and the other assets. And the local fun damager saying that Prosus will do well as local fun damagers don’t understand tech should hang his head in shame. The issue was simple weighting, one couldn’t have Naspers at full weight in a fund, never mind over weight. So they had to decide how under weight they wanted to be and as such a large discount happened.
    • As I record value unlock is some 3% with Prosus at R1,204 and Napsers off R1,100 adding R104 of value.
    • Bottom line for me is that I expect Prosus to be the better asset due to the Amsterdam listing.
    • And the awkward moment was the JSE not reflecting the indices right as they hadn’t included Prosus in the indices that Naspers was in. So everything looked real ugly for a while. They fixed it. For next day or two Prosus will live in same index as Naspers, then JSE will rebalance either kicking Prosus out or keeping it in and kicking out the smallest.

  • Intu (JSE code: ITU) flies on reports of a possible bid for the company by Orion Capital Managers. The problem is that the first two bidders both walked away, but I guess at some price the deal works?
  • Labat (JSE code: LAB) is buying into cannabis, well kinda. A very small deal and we’ll see. But I for one would not being buying the shares. Labat do not have the best track record on anything and sure cannabis is becoming legal all over. But that doesn’t mean the profits flow, where I come from we don’t call it cannabis we call it weed, because it grows like a weed.
  • Famous Brands* (JSE code: FBR) trading update mostly as expected. GBK doing better after last years restructuring while local brands doing modest after inflation and new stores removed. The new issue is manufacturing where Lamberts Bay Foods is down 39% after losing one client? Talk about concentration risk.
  • Moody’s says no junk status for 12-18 months. So no need for immediate panic and first they need to drop us to negative outlook anyway.
  • Jack Ma steeping down at chair of Alibaba. He stepped down as CEO in 2015 and is an amazing individual. He’s 55 and got his first computer at age 33 starting Alibaba in 1999 and the company is now worth some US$460billion.

* I hold ungeared positions.

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