From Fin24Tech, a subsidiary of Naspers.

The massive growth in Chinese markets is highly relevant to the South African market at this stage, said Daniël Kriel, CEO of Sanlam Private Wealth, in a special focus on Naspers.

He said the value of Naspers is determined mainly by the Chinese technology giant Tencent, in which the South African Internet giant holds a 34-percent stake.

( Naspers is a South African multinational mass media corporation with headquarters in Cape Town. Its main operations are in Internet services, pay TV and print media.)

Approximately 75 percent of Naspers’ value is made up of the investment in Tencent, currently the biggest Internet company in China. The value of Naspers’ interest in Tencent is worth 780 billion rand ($63.4 billion US), about the same as Naspers’ current market capitalization.

“The Shanghai Composite Index has already doubled since August 2014 and, over the last nine months, Chinese shares have been the best performing worldwide. Since the beginning of the year, the index has already increased by 30 percent in dollar terms,” explained Kriel.

“Valuations appear dangerously high with 18 percent of the shares on the secondary Shenzhen stock exchange trading at a future price/earnings ratio of more than 100. For the year to date, 244 (one in every six) Chinese shares have already doubled in price.”

He pointed out that many analysts feel these levels remind them of the highs reached by technology shares prior to the dot-com bubble in 2000.

 

Read more at Fin24Tech.