Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Can Tencent overcome latest sell-offs?

Tencent Holdings shares continue to trade at a three-month low, amid concerns that Chinese financial regulators could be targeting the group next.

Source: Bloomberg
  • Tencent Holdings (HKG: 0700) share price stays weakened, amid concerns of a crackdown by Chinese regulators
  • Last Friday (12 March 2021), the internet giant’s stock fell 4.4% after it was fined by China’s top antitrust regulator for a 2018 investment deal
  • Shares are still trading at a three-month low price of HK$624 on Wednesday (17 March)
  • Trade Tencent shares with an IG account

Tencent share price: what's the latest?

Tencent Holding shares remain down on Wednesday (17 March 2021), amid concerns that the group will become Chinese authorities’ next target in a crackdown on the country’s biggest technology companies.

Tencent’s stock fell over 4% on Monday, following a 4.4% drop last Friday spurred by a fine by China’s top antitrust regulator.

Last week, a total of 12 companies – including Tencent, Alibaba, Baidu, ByteDance, Meituan and JD.com – were each fined 500,000 yuan (US$77,000) by the State Administration for Market Regulation for ten internet investment deals that were found to have breached China’s anti-monopoly law.

Tencent’s 2018 investment in educational technology firm Yuanfudao were among the deals named.

China’s anti-monopoly law states that firms must report deals that could potentially create a ‘market-dominant player’, or one holding a more than 50% share of its market.

In December 2020, Tencent’s ebook spinoff China Literature was fined the same amount, after failing to report past acquisition deals.

As at 13:45 HKT, Tencent shares are trading at a three-month low of HK$624. The stock is still up 9% year to date.

Is Tencent the next target of financial regulators?

Although the fines are nothing compared to the market capitalisation of the companies, market observers believe they could be the start of much tighter scrutiny.

According to people close to China's top financial regulators, Tencent is being pointed out as the next most likely target for increased supervision, following Jack Ma's Ant Group, Bloomberg reported.

Similar to Ant Group, Tencent will probably be made to set up a financial holding company for its banking, insurance and payments businesses.

Following last week’s fine, Tencent said it will ‘continue to adapt to changes in the regulatory environment’, which it views as ‘beneficial to the industry, and will seek to ensure full compliance’. However, it did not comment on financial regulatory matters.

This latest decline has already erased the internet giant’s market cap by some US$62 billion, equivalent to over half the value of its online finance business.

Tencent’s payments and fintech business is estimated to be worth between US$105 billion and US$120 billion, according to Bernstein data.

The payments business alone is said to be worth roughly US$70 billion to US$80 billion. The credit, wealth management and insurance arms make up the remaining US$35 billion to US$40 billion.

Tencent’s fintech business posted a revenue of about 84 billion yuan (US$13 billion) in 2019, which constituted 22% of the company’s total sales – the second largest segment after online entertainment.

Trade today's hottest stocks with IG – long or short

Create an IG account or log in to your existing account to get started now.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.