Fears over Chinese regulatory interference aren’t going away, with Tencent the latest stock to slump on chatter about Beijing seeking to wield its power.
“Talk that gaming will be the next sector to come under pressure from the authorities in China saw Tencent’s shares fall more than 10% at one point on Tuesday. They are now down by more than a fifth year to date as investors reassess their willingness to have exposure to big Chinese names,” says Russ Mould, investment director at AJ Bell.
“This is turning out to be one of the big stories of 2021 for global markets, overshadowing what many people thought would the key focal point for Asia – namely a year of strong economic growth.
“As part of the broader issues troubling Asia, it is also worth watching property developer China Evergrande after yet more suppliers said payments were overdue. This highly indebted company is one of the biggest players in the Chinese property market and it would be highly embarrassing to the government if it collapsed due to financial pressures. Its shares fell nearly 8%, meaning the stock is now down by 63% year to date.
“On the UK market, the FTSE 100 rose 0.4% to 7,108, led by BP swinging back into profit for its half year. While there was the long-awaited news of a share buyback, confirmed at $1.4 billion, some investors may be disappointed at the paltry rise in the dividend. BP nudged up the shareholder payout by 4%, which pales in comparison to Royal Dutch Shell’s 40% increase declared last month.”