Tencent shares suddenly lose $17bn one day before earnings | Fin24
 
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Tencent shares suddenly lose $17bn one day before earnings

May 15 2018 12:36
Sofia Horta e Costa, Bloomberg

Tencent is back below HK$400 as investors await its quarterly earnings.

The shares slumped 3.4% on Tuesday for the biggest drag on the Hang Seng Index, taking its losses since a record in January to $95bn.

Whether it’s just a case of profit taking after a five-day rally, whispers about quarterly numbers, or just index rebalancing ahead of China’s MSCI inclusion at the end of the month, the drop may reinforce concerns about the company’s earnings.

Analysts predict the Chinese Internet giant will probably report its lowest profitability since at least 2003 after the close of trading on Wednesday.

Adding to the jitters was a 14% after-hours slump in Vipshop, a New York-listed Chinese retailer which counts Tencent as one of its investors.

The options market is implying a move of 3% either way after the results day, which would be the biggest earnings reaction in more than two years.

* Fin24's parent company Media24 is part of the Naspers Group. Naspers owns a stake in Tencent.

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