Tencent has biggest drop in almost a year

2015-04-14 08:19
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WeChat. (Duncan Alfreds, Fin24)

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Hong Kong - Tencent Holdings slumped for the first time in 10 days after billionaire chair Ma Huateng cut his stake in the operator of Asia’s most popular message services.

The stock fell 4.4% to HK$163 at the trading break in Hong Kong, the most in almost a year. The benchmark Hang Seng Index declined 0.5%.

READ: Naspers' Tencent bet pays off as shares surge

Ma, China’s third-richest person, cut his stake to 9.65% from 9.86% and raised a combined HK$3.22bn ($415m), according to filings to the Hong Kong stock exchange on Monday. Selling shares sent a signal to investors to withdraw from the stock after a 62% surge in the 12 months up to Monday, Louis Tse, a Hong Kong-based director of VC Brokerage, said on Tuesday.

“If the chair of a company starts selling, it probably means the market could start taking a beating,” Tse said. “The market has risen so much, it was expected to come down at some point.”

The Hang Seng Index has surged 18% this year, reaching the highest level since December 2007. An unexpected drop in Chinese exports spurred speculation that authorities will increase stimulus to support economic growth.

Ma sold 10 million Tencent shares on Thursday at an average of HK$162.26 each, and another 10 million shares on Friday at an average of HK$159.81 each, according to two disclosure filings to the Hong Kong stock exchange.

Tencent reported a jump in online advertising revenue during the fourth quarter, buoying the outlook for higher earnings from its WeChat and QQ messaging services.

Net income for the three months to end-December rose 50% as Tencent develops its advertising, payment services, online games and content streaming businesses.

ALSO READ: China's Tencent launches online bank

Read more about: wechat  |  tencent  |  media  |  tech

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