Tencent continues to suffer in Hong Kong markets amid WeChat ban

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It has been a rocky start for the Asian markets as Tencent has dragged the Hong Kong stock market down pointing to a six-week low.

The negative sentiment that brought about the markets was due to President Donald Trump signing an executive order to put TikTok and WeChat down. As of this writing, the Hang Seng Index has dropped over 40 points to start the week.

With the recent dominance of Tencent over Facebook, it looks like this stock drop may give a chance for Facebook to catch up.

Heavy losses at China’s technology sector amid Trump ban

Last Friday, the majority of Hong Kong’s top 30 tech stocks fell 2.5% after the official news of the POTUS signing the executive order.

The stock price for Tencent has been heavily battered losing over 10% since it reached its July 21 high at HK$564 [AU$101] per share now trading at HK$507.50 as of this writing.

A tweet from LA Times reporter Sam Dean tells us that Tencent’s gaming sector won’t be affected, only WeChat transactions. However, the ban could greatly impact future earnings.

However, Tencent will release its upcoming earnings report this week so investors are waiting in anticipation of the results.

Chinese firms may face problems before 2022

However, because of the ongoing U.S. and China tensions, it seems that Tencent isn’t the only one facing problems.

As per South China Morning Post, Apple suppliers also took a toll amid the ban of WeChat forcing the Chinese market to look for iPhone alternatives.

A bigger problem for Tencent and other Chinese companies is that they might face a risk of being delisted in the U.S. stock exchanges if they fail to meet audit standards by 2022.

Featured image courtesy of Jonas Lee/Unsplash

Alec Padua

Alec a former mobile app developer turned independent singer-songwriter and busker based in the Philippines, who goes by the stage name "Alex Corner". He has released songs on Spotify and other music digital platforms. A self-taught trader and financial market enthusiast, he also started his own YouTube channel and blog called "The Trading Comedy" where he documents his trading journey in the Philippine Stock Market and beyond. He is also a casual gamer and streamer who enjoys FPS, RPG, and strategy games as well as conducting live charting sessions in the financial markets.

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