Chinese technology giant Tencent Holdings is experiencing a slump in the stock market. For the second day in a row, its shares are declining and in terms of market capitalization, the company has already lost almost $ 60 billion, ie 1.3 trillion crowns. The reason is the fear of regulating the Chinese administration, which is increasingly opposed to technology giants. The market capitalization of the company in dollars is over 800 billion.
Shares of the Chinese company are sold on the Hong Kong Stock Exchange on Monday with a price tag 3.4 percent lower than on Friday. On the last trading day of last week, the shares depreciated by four percent. The market is responding to the fact that Chinese regulators want to supervise the company much more strictly. The giant will thus probably be forced to establish a regulated financial holding company, which will offer its banking and other financial services, he says. according to Bloomberg people close to the situation.
At the beginning of March, Chinese Prime Minister Li Kcheichiang spoke about greater supervision of technology players. He promised at the congress of the National People’s Assembly that he would prevent the unregulated expansion of Fintech’s monopolies.
In addition, the rift can go beyond Tencent’s fintech division. The Chinese antitrust authority fined the company on Friday for failing to seek approval for the announced investments and acquisitions. The market also fears that the Chinese government may intensify the fight, for example in the gaming industry, where Tencent is even the largest player in the world.
However, the British bank Bernstein alleviates concerns. “The regulatory risk that Tencent faces is not as dramatic as in the case of Alibaba,” said its analysts. “Tencent’s management does not profile itself publicly, which is clearly an advantage. And more importantly, Tencent still has a significant advantage over its competitors in its main markets, “they added. According to the bank, the Chinese giant’s payment and other fintech business is worth between $ 100 billion and $ 120 billion.
Last week, The Wall Street Journal wrote that the Chinese antitrust authority is considering a record fine for the Alibaba online store, according to known sources. As in the case of Tecnet, the Office does not like its alleged monopoly conduct.