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A sharp opinion piece in the state media knocks social media giant Tencent down by up to 10 percent.
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Prophetic words, it turned out Tuesday. Social media giant Tencent, with its ‘all-in-one’ app WeChat also a very popular gaming platform, suddenly tumbled up to 10 percent lower on the Hong Kong stock exchange. The reason? A link to a damning opinion piece about the gaming sector in The Economic Information Daily, a branch of the Xinhua state news agency.
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The article labels the industry as “spiritual opium.” ‘No industry or sport should get rich by erasing an entire generation’, the piece refers to the major impact of gaming on schoolchildren.
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It is logical that investors are feeling the downpour. “You’d better keep an eye on every Xinhua story,” said Ke Yan, an analyst at DZT Research in Singapore.
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According to him, the article with the harsh description ‘spiritual opium’ foreshadows actions by the Chinese communist party. Last week, Beijing introduced draconian measures against private education, which hurt stocks in the sector knocked down hard.
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Although a bis number is not certain: the Chinese state media suddenly removed the link to the critical piece later in the day, so that the Tencent share was able to halve the losses to about 5 percent after the lunch break.
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