Tencent’s terrible quarter spells more pain for emerging funds

Tencent is popping right serious drag for emerging-market investors.

The stock has tumbled 18% since June, its worst performance compared to an index of world technology companies as it started buying and selling 2004. The best stock in Asia — and another which 48 analysts recommend buying — extended its decline Friday at the same time the MSCI World I . t . Index going to its seventh consecutive quarterly gain.

Tencent’s fall from grace has turned it on the world’s most disappointing stock trade this holiday season, bringing about up to 50 % on the Hang Seng Index’s decline within the third quarter. Due to the size and rally in 2017, it features in than one half of all emerging-market equity portfolios, and those that own it present an average 5.2% exposure, according to eVestment data by June. That makes Tencent their largest position, the knowledge show.

The Chinese company’s shares were overwhelmed by its first?profit drop?in as a minimum decade,?revoked?licenses in addition to a?significant?regulatory wall near your vicinity.

One potential beneficiary of outflows from Tencent is Taiwan Semiconductor Manufacturing Co., which has the second-largest weighting on MSCI’s emerging market index. The chipmaker surged 21% in its best quarter since 2003.

? 2018 Bloomberg L.P

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