The biggest shareholder of Tencent is bullish when it comes to technology stocks in China in spite of the trade war between China and US. An internet and media company of South Africa, Naspers, owns 31% stake in the tech giant of China Tencent.
Bob van Dijk, Naspers CEO, said China’s technology stocks like Tencent have become victim to the trade war between China and US. However, he added that the foundation of the economy of China remains very strong.
He said that in the last few months, the scene of China technology stock has not been good. Dijk added that he thinks everything had to do with the trade tensions and it is affecting everybody. He said that it is not good, but if you take the view of 10 years, then the market exists, innovation exists, so the future is still bright. The internet exchange fund Krane Shares CSI China that tracks the tech stocks of China including Alibaba, Baidu and Tencent has dropped 14% in last three months because of the trade wars between the two economies. As both the economies try to dominate areas like artificial intelligence and 5G, technology has become a battleground in the trade war.
The shares of Tencent are better in 2019 than 2018 after regulators of China approved video games which are an important source of Tencent’s revenue.
In addition to messaging and gaming, Tencent is growing its cloud and payments services.
Dijk said he is expecting that technology companies would be targeted in trade war. However, he added that he wasn’t concerned about Tencent, thankfully to the company’s business model.
Naspers in 2001 invested $32 million in Tencent, a company that was little known at that time. The stake is today worth $126 billion when Tencent’s market closed on Monday. Dijk said that it was the perfect investment done by any company and therefore they are lucky to be linked to them, but he added that he looks forward and that best is still to come.