The world is changing fast and to keep up you need local knowledge with global context.
JOHANNESBURG — Among US stocks, Facebook might have lost an eye-opening $136bn in recent trading sessions, but Tencent’s losses may have Naspers’ shareholders sweating a bit at the moment amid the Chinese tech giant having lost $140bn in market value this year thus far. On Tuesday morning in Hong Kong, Tencent’s share price was already down over 3.5% in trade, marking yet another bad day for the company. It appears as if the good days have come to a rapid end for global tech stocks. And it will be interesting to see if Naspers then still goes ahead with a plan to list some of its businesses amid this rapidly changing environment. – Gareth van Zyl
The Chinese Internet giant has tumbled 25 percent from its January peak, erasing about $140 billion of market value. That’s the biggest wipeout of shareholder wealth worldwide, as measured from the date of each stock’s 52-week high. Facebook Inc., the F in the FANG block of mega-cap US tech stocks, is the second-biggest loser with a $136 billion slump over the past three trading sessions.
Investors around the world are beginning to question whether the best days are over for technology stocks – the leaders of a nine-year boom in global equities. Tencent, Asia’s second-largest company after e-commerce behemoth Alibaba Group Holding Ltd., has also been dogged by concern that growth in its mobile-gaming unit is slowing. The stock, down 2.7 percent on Tuesday and 9.2 percent in July, is poised for its biggest monthly retreat since 2014.
“Investors are increasingly pricing in lower expectations for Tencent’s interim results,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Overall, tech companies are facing a similar problem. They have been enjoying fast profit growth in the past few years, so it will be difficult for them to maintain similar growth in the future as the competition grows and some segments are saturated.”
Tencent’s year-on-year profit growth probably slowed to 5.1 percent in the second quarter, the weakest pace since 2012, according to analyst estimates compiled by Bloomberg before the company releases results on Aug. 15. At least 11 brokerages cut their Tencent share-price target this month, including Credit Suisse Group AG and Morgan Stanley.
Still, analysts haven’t turned bearish: All 51 forecasters tracked by Bloomberg have a buy recommendation on Tencent shares, with the average price target implying a 44 percent gain over the next 12 months.