Aug. 11 (Bloomberg) -- Naspers Ltd., Africa’s largest media company, rose the most in more than two years on speculation yesterday’s drop to the lowest in almost a year was overdone.
The stock advanced 26.41 rand, or 8.2 percent, to close at 349.01 rand at 5 p.m. in Johannesburg, its biggest gain since May 2009. Naspers plunged 4.2 percent yesterday after Tencent Holdings Ltd., in which the South African company has a 35 percent stake, reported profit that missed analysts’ estimates. The company’s 14-day relative strength index, which shows how rapidly prices advanced or dropped during a specified time period, was 29.5 yesterday, the lowest since July 2010. A reading of 30 or below signals to some investors that shares are set to increase.
Kevin Mattison, an analyst at Avior Research Ltd., said there had been an overreaction to Tencent’s results, which were released in Hong Kong after the market had closed.
“The big surprise was that operating expenses had gone up, but the core business is still operating well,” Mattison said by phone from Cape Town. “Both these shares are high-beta shares and these are not normal times.”
High-beta refers to volatile stocks.
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