Tencent’s US$16.4 billion surprise dividend windfall lights up Hong Kong stock market while JD.com slumps
- Tencent to distribute most of its holding in JD.com to shareholders as interim dividend, a stake valued at US$16.4 billion at recent market price
- Hang Seng Index logged a three-day winning run as investors picked up value in beaten-down stocks
The Hang Seng Index gained 0.4 per cent to 23,193.64 at the close of Thursday trading. The Tech Index slipped 0.8 per cent, while China’s Shanghai Composite Index rose 0.6 per cent.
JD.com crashed 7 per cent to HK$259.60, set for the worst decline since a 9.4 per cent sell-off on July 26, on concerns it may lose support from one of China’s biggest tech companies. The dividend plan will leave Chairman and CEO Richard Liu Qiandong and Walmart as JD.com’s biggest shareholders, based on its most-recent annual report.
“Other tech giants are likely to follow suit as Chinese authorities would like these big companies to reduce their market share in other sectors,” said Gary Ching, vice-president of research at Guosen Securities. “The risk is transferred to retail investors, so they should be cautious of such dividend actions.”
The Hang Seng Index, however, has fallen about 15 per cent this year with US$283 billion of market value erased from its 64 blue-chip members. The setback ranks Hong Kong as the worst performer among major global stock markets, unable to overturn losses caused by a series of regulatory crackdown and an economic slowdown.
