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The Weekend Edition
The Weekend Edition
Published Date: 2020-05-23 | Source: INCE|Community Weekly | Author: Stephen Gunnion
Markets entered the weekend on the back foot after China proposed controversial national security laws for Hong Kong that will strengthen its hold on the semi-autonomous enclave if they are enacted and could result in it coming under full Chinese control. The US has already condemned the move, saying it will 'react strongly' if China moves ahead with the new legislation.
The JSE declined close to 2% yesterday, with Naspers and Prosus weighing on the market. Through Prosus, Naspers owns a significant stake in Tencent, the Chinese gaming and Internet giant that is listed on the Hong Kong Stock Exchange.
Perhaps due to the current Covid-19 crisis, China is seeing an opportunity to make its move on Hong Kong while the world is distracted by the pandemic. Mr Price may also be seeing opportunities in the beaten down retail sector as a result of the crisis. The retailer has asked shareholders to approve the issue of share for cash, which could result in an equity raise as it prepares to take advantage of growth areas that it has identified - either organically or by making acquisitions.
Mr Price's announcement was amongst InceConnect's most read stories this week, as was an update from Distell, which has been severely impacted by the restriction on alcohol sales under the Covid-19 lockdown. Rhodes Food Group posted strong first-half sales as shoppers stocked up on long-life foods ahead of the lockdown but its international operations let it down, with limited shipments to China in the first quarter of this year. Meanwhile, Aspen is sticking to its guidance for increased profit, with demand for some of its products rising as a result of the pandemic.
Enjoy the remainder of your weekend.
Managing Editor, InceConnect
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