Tencent shares worth $7.6bn appear in Hong Kong clearing system

Tencent shareholders added $7.6bn in shares to Hong Kong’s clearing and settlement system, prompting speculation that its biggest shareholder, South African group Naspers, was selling part of its 29 per cent stake.

The move comes two months after Prosus, the company’s Amsterdam-listed international investment arm, abandoned its pledge not to sell stock in Tencent, one of China’s most valuable companies.

Global investors are cutting their holdings in Chinese technology stocks following a government crackdown and regulatory onslaught that has bruised the sector. The S&P China Tech 50 index, which tracks the 50 largest Chinese companies in the sector, is down 36 per cent over the past 12 months.

SoftBank sold the bulk of its stake in Alibaba in August, while Warren Buffett’s Berkshire Hathaway has lowered its holdings in Chinese electric carmaker BYD.

Naspers’ warning that it would sell its Tencent stake has weighed on the group, with the company’s shares declining more than 20 per cent since a June peak. Tencent’s shares closed down more than 3 per cent on Thursday.

Undisclosed shareholders put 192mn shares worth $7.6bn in Hong Kong’s Central Clearing and Automated Settlement System on Wednesday. Shares are usually put in the clearing system before being sold.

Ke Yan, an analyst with DZT Research who publishes on the Smartkarma platform, said it was “likely” the seller was Naspers, considering it had already flagged that it would gradually trim its stake.

Naspers did not respond to a request for comment.

In June, Naspers said the decision to sell Tencent stock was to finance a buyback to help its struggling share price. The company is attempting to narrow the gap between the valuations of its listed vehicles and that of its Tencent stake.

The Chinese tech giant reported its first decline in quarterly revenues for the period ending in June after advertising revenue shrank 18 per cent.

Beijing’s crackdown on the tech sector has come as growth in the world’s second-largest economy has been dragged down by a crisis in the property sector and rolling Covid-19 lockdowns.

Tencent itself has been selling down its own stakes in tech companies such as JD.com and Singapore’s Sea. The Financial Times reported that the company has outlined a soft target of divesting about Rmb100bn ($14.5bn) this year, depending on market conditions.