Tencent Holdings Ltd stocks slid by more than 6.7% in Hong Kong on Tuesday, following a record-breaking rally that pushed the tech conglomerate’s market value close to the $1 trillion mark in what was an unprecedented feat.
The multinational Shenzhen-based company enjoyed an 11% surge on Monday, which was the organization’s largest share value increase in almost a decade. On Tuesday, the tech giant slipped by almost 6.7%, pulling its market value back down to $900 billion.
While Tencent was experiencing its recent fluctuations, an advisor to the central bank of China warned that significantly low borrowing costs and excess in liquidity were leading to the formation of bubbles in the stock market.
Having clearly taken to this advisor’s warning, the Chinese government now looks to tighten funding conditions; a move that could further damage the prospect of a further Tencent stock rally. With more than one billion users on WeChat as of present, Tencent has proven to be a feasible alternative to online retail giant Alibaba Group Holding Ltd, whose stocks are often inaccessible to prospective investors.
Since its initial public offering in 2004, Tencent Holdings Ltd has inflated by more than 100,000%, making it one of Asia’s most favorite investment options.
