Should You Be Worried If You Own Tencent Stock?
When retail investors and mutual fund managers chase rallies, black swan events like corruption investigations aren’t going to matter much.
Tencent headquarters in Shenzhen.
Photographer: Yan Cong/BloombergShort sellers are not the only ones suffering these days. Think about all the poor stock pickers who follow textbook rules for investing. Corporate governance and valuation are taking a back seat in a market driven by liquidity.
Consider Tencent Holdings Ltd., China’s most valuable publicly listed company and purveyor of the ubiquitous WeChat app that Chinese consumers use to buy, purchase and communicate. Its Hong Kong shares barely budged after the Wall Street Journal reported that an employee there was being held as part of a high-profile corruption investigation. The stock also wasn’t much affected when the company said earlier this month that it had let go of more than 100 people on suspicion of graft. In November, markets had gone into a $290 billion equity selloff on the news that consumer protection and data security were the centerpiece of China’s new sweeping anti-monopoly regulations.