Tencent Holdings jumped the most in two weeks after White House officials are said to have reassured American businesses that a ban on its WeChat app won’t be as broad as feared.
Donald Trump’s WeChat ban targets a celebrated Chinese innovation at the heart of the world’s largest mobile gaming and social media empire, threatening one of the more eye-catching stock rallies of 2020.
Tencent added to Friday’s sharp decline to start the week, helping lead weakness in technology shares after the US’s move to ban residents from doing business with the company’s WeChat app.
Tencent, one of Asia’s biggest companies, is little known beyond the tech world. But its WeChat super app has more than a billion users worldwide.
Index heavyweight Naspers dropped 4.4% after US President Donald Trump signed a pair of executive orders prohibiting US residents from doing business with the Chinese-owned TikTok and WeChat apps.
The Trump administration’s move to ban US residents from doing business with Tencent’s WeChat app rippled through Chinese markets, erasing $46-billion from the Internet giant’s market value.
The Trump administration said on Wednesday it was stepping up efforts to purge “untrusted” Chinese apps from US digital networks and called TikTok and WeChat “significant threats”.
White House adviser Peter Navarro said he expects US President Donald Trump to take “strong action” against Chinese-owned social media apps TikTok and WeChat for engaging in “information warfare” against the US.
Tencent Holdings analysts, who have a history of being too bullish, have now been caught off guard by a rally that’s gathering pace in Asia’s biggest stock.
With over 2.3 billion monthly active users around the world, it’s not a stretch to imagine that Facebook could have great influence over who pays whom, and how.