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Saturday, September 03, 2022 1:06:10 PM
Tencent Divestment Concerns Add to China Pressure
By: Bloomberg | September 2, 2022
In a world awash in technology stocks for sale, the last thing bulls want to see is more big sellers hitting the market. In China, that appears to be just what’s happening.
Investors are fretting that Tencent Holdings Ltd. will add to pressure on the market if it moves ahead with a reported plan to offload 100 billion yuan ($14.5 billion) from its equity portfolio. While the company denied the report, that was little comfort to stockholders, who pushed down the share prices of Tencent investees such as Pinduoduo Inc. and KE Holdings Inc.
A divestment would follow similar moves under consideration by Baidu Inc. and Alibaba Group Holding Ltd. as the internet giants seek to assuage regulators concerned about their sway over the industry. And it would just deepen the gloom around Chinese tech stocks still reeling from Beijing’s regulatory clampdown. The Nasdaq Golden Dragon Index of US-listed Chinese stocks has plunged 64% from its 2021 record.
“The current market environment is not favorable and may substantially exacerbate the negative impacts on the share prices of the targeted companies being off-loaded,” said Redmond Wong, Saxo Capital Markets strategist.
Investors are now paying attention to what is next. Alibaba -- which arguably faced the worst of the regulatory crackdown -- holds a stake in at least six US-listed stocks, including XPeng Inc. and Weibo Corp., according to exchange filings. Baidu owns a controlling stake in iQiyi Inc., while e-commerce giant JD.com Inc. is a shareholder of its peer Vipshop Holdings Ltd., Bloomberg data shows.
China’s tech titans have plenty of incentive to pare their stakes in listed companies. Besides appeasing regulators, reducing their holdings also slims balance sheets and gives firms the ability to invest those funds into more profitable operations...
Read Full Story »»»
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By: Bloomberg | September 2, 2022
In a world awash in technology stocks for sale, the last thing bulls want to see is more big sellers hitting the market. In China, that appears to be just what’s happening.
Investors are fretting that Tencent Holdings Ltd. will add to pressure on the market if it moves ahead with a reported plan to offload 100 billion yuan ($14.5 billion) from its equity portfolio. While the company denied the report, that was little comfort to stockholders, who pushed down the share prices of Tencent investees such as Pinduoduo Inc. and KE Holdings Inc.
A divestment would follow similar moves under consideration by Baidu Inc. and Alibaba Group Holding Ltd. as the internet giants seek to assuage regulators concerned about their sway over the industry. And it would just deepen the gloom around Chinese tech stocks still reeling from Beijing’s regulatory clampdown. The Nasdaq Golden Dragon Index of US-listed Chinese stocks has plunged 64% from its 2021 record.
“The current market environment is not favorable and may substantially exacerbate the negative impacts on the share prices of the targeted companies being off-loaded,” said Redmond Wong, Saxo Capital Markets strategist.
Investors are now paying attention to what is next. Alibaba -- which arguably faced the worst of the regulatory crackdown -- holds a stake in at least six US-listed stocks, including XPeng Inc. and Weibo Corp., according to exchange filings. Baidu owns a controlling stake in iQiyi Inc., while e-commerce giant JD.com Inc. is a shareholder of its peer Vipshop Holdings Ltd., Bloomberg data shows.
China’s tech titans have plenty of incentive to pare their stakes in listed companies. Besides appeasing regulators, reducing their holdings also slims balance sheets and gives firms the ability to invest those funds into more profitable operations...
Read Full Story »»»
DiscoverGold
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