Block Trades Show Investors Losing Faith in Asia’s Biggest Stock

(Bloomberg) -- Tencent Holdings Ltd. shareholders just had their worst week in months, with a series of large trades adding more pressure to Asia’s biggest stock.

Three blocks totaling more than one million shares were conducted off-exchange just before 10 a.m. Friday. While the trades were only worth about HK$355 million ($45 million), they all crossed at HK$319.50 -- just below the key support level. The trades were conducted by three brokers, according to people who saw them, signaling multiple entities were involved. The stock fell 0.8% to the lowest since Jan. 8.

Tencent shares have been in focus this week after a mystery drop on Wednesday weighed on the broader Hong Kong market. Analysts are sticking with their bullish calls before the Chinese Internet giant’s third-quarter update next month, with Citigroup Inc.’s Alicia Yap lifting her price target on the stock.

Block Trades Show Investors Losing Faith in Asia’s Biggest Stock

While it’s unclear whether the block trades were carried out by dip buyers or large shareholders trimming their stakes, Tencent’s drop shows investors remain nervous. The stock has lost almost $100 billion in value since April, and is close to erasing this year’s gains.

Tencent is one company that analysts have loved for years, with none of the 57 ratings tracked by Bloomberg saying sell. The average HK$414.19 target price implies a 31% gain from Friday’s close. Tencent lost 4.4% this week, the worst performance since early August.

©2019 Bloomberg L.P.

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