Prosus’ dual listing creating problems for the JSE

Prosus owns 31 percent of Tencent, the fourth-largest internet company in the world. Photo: Reuters

CAPE TOWN – The Euronesxt listing of Prosus was punted as a way to reduce Naspers’ weighting on the JSE, but the Prosus dual listing has created similar problems for the JSE’s capped indices.

To resolve the problem, the JSE suggested a first-in-the-world solution to solving the problem of its capped indices being overweight of Chinese internet firm Tencent through Naspers, and also through Prosus.

The reason indices are capped is to reduce single stock exposure. 

“In this context, there may be a proposal that Naspers and Prosus are treated as a single entity for index capping purposes, despite them being two separate listed entities,” the JSE said in a statement yesterday. 

Various market participants have expressed concern about the combined weight of Naspers and Prosus in the FTSE/JSE capped indices, specifically the capped SWIX All Share index, which has become a benchmark for local equity funds in South Africa.