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AFRICA FASHION WEEK NIGERIA

Tuesday, May 15, 2018

Tencent shares slumped sharply a day before earnings report

Hong Kong — Tencent Holdings 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 the decline in its market cap since the share hit 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 concern 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 Holdings, a New York-listed Chinese retailer that counts Tencent as one of its investors.
The options market is implying a move of 3% either way after the results, which would be the biggest earnings reaction in more than two years.

Shares in Naspers, which owns 31% of Tencent, fell as much as 3.2% to R3,125 on the JSE on Tuesday morning.

Bloomberg

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