Tencent's $66 billion wipeout bodes ill for Hong Kong stocks | Fin24
 
  • Ferial Haffajee

    Why Minister of Public Enterprises Pravin Gordhan’s patriotism call to fly SAA flopped.

  • Solly Moeng

    State capture is meant to be over, but we aren't free if its beneficiaries go unpunished.

  • South African Airways

    A business rescue practitioner has been appointed to try and save the struggling flag carrier.

Loading...

Tencent's $66 billion wipeout bodes ill for Hong Kong stocks

May 21 2019 14:28
Richard Frost, Bloomberg

A quickening tumble in Tencent Holdings is likely to aggravate this month’s slump in Hong Kong equities as the trade war intensifies in the tech sector.

Tencent has plunged 14% since last month’s high to wipe out $66bn of value, and selling momentum in the stock is the most intense since October. After being the biggest contributor to gains on Hong Kong’s Hang Seng Index earlier this year it’s since turned into the largest drag.

Unimpressive first-quarter earnings spurred rare downgrades, with analysts now the least bullish since 2016, while the Chinese release of a Battle Royale-style shooter was met with disappointment.

As the US tightens the noose on Huawei, investors are bailing out of Chinese tech companies - Alibaba Group sank the most in six months on Monday and Baidu tumbled more than 8%.

LOSSES ESCALATING

With the Hang Seng Index closing below the support level of 28 000 on Monday, souring sentiment toward such a heavyweight Tencent makes the gauge more vulnerable to further losses, especially as trade war rhetoric turns more strident.

The gauge dropped 0.5% on Tuesday to close at its lowest level since January, with Tencent falling for a fourth day.

tencent  |  ict  |  companies
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...