Prosus -  a familiar newcomer

Prosus - a familiar newcomer

by Pininvest Analysis

Great Companies - US and International on pininvest.com

  • 14 constituents
  • 52.3% 1y performance
  • 36.7% volatility
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Pin-insights

Most companies on the Great Companies selection will be familiar – or should soon be – and we hope to draw investor attention to some of the lesser known successes

Dutch Adyen , market cap $50 billion (€41.7 billion), e-commerce, mobile, and point-of-sale payment processor for 3 500 companies around the world, is an outstanding example

More unusual, in the selection, is Prosus NV., also listed in Amsterdam and on OTC markets  for U.S. investors

Prosus’ market cap of $164 billion (€139 billion) is the largest in the entire selection, edging past still another Dutch behemoth, semi-conductor equipment manufacturer ASML 

 

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Prosus may be an unfamiliar entity but the underlying asset of the firm is not

Prosus is the spin-off of South-Africa’s Naspers , consigning its technology, Internet, food delivery, payments and education holdings in this separate firm

And Naspers’ premier technology asset is the $32 million investment made by the firm back in 2001 for what is today a 31% interest in … Tencent , China’s communication and gaming giant – an investment valued at $221 billion

The spin-off has been justified by the fact that Naspers had become entirely dominant on the South-African exchange and also because the holding squeezed all the other lines of business initiated by Naspers

 

Of further great significance is the announcement of inclusion of Prosus in Swiss blue-chip Euro Stoxx 50 index, as of Sept. 21, '20

Capturing about 60% of the free-float market cap of the EURO STOXX Total Market Index, the Stoxx 50 includes all the storied names of Europe’s business, such as SAP , ASML, Total , Siemens and Unilever 

According to the Stoxx factsheet, Euro Stoxx 50 is one of the most liquid indices for the Eurozone, serving as underlying for financial products (options, futures, ETFs) and for benchmarking purposes

The index is the benchmark of hundreds of ETFs and other passive funds and it can be expected that Prosus with a market cap of €139 billion will climb the ranks just behind SAP (market cap €169 billion and 6.46% of the index weighted by free-float market cap, as of July 31)

Among other new entrants are already mentioned Adyen (market cap €41.7 billion) , German residential real estate company Vonovia (market cap €32.8 billion) , French wine and spirits group Pernod Ricard (market cap €39 billion) and Finland's elevator maker Kone (market cap €32 billion)

By a singular twist of fortunes, the Stoxx 50 – and the funds benchmarking the index – will gain exposure to global companies not only operating in Europe and in America, but in China as well… a Global Stoxx 50 on the march…?