- Tencent Holdings shares have nearly doubled with its valuation in Hong Kong increasing by roughly 95% since October as financing for the gaming sector and new titles have started to stream once more. The increase indicates that China is getting ready to halt its campaign against large digital companies and hopes for the country's reopening.
- Some politicians have called for a pause on China's strictest regulatory constraints, which is a significant boon for the industry. But the government's acceptance of billionaire Jack Ma's Ant Group Co.'s request to raise $1.5B in Beijing is the most convincing proof so far that the government is indeed relaxing. The abrupt postponement of the company's IPO in 2020 signaled the beginning of China's regulatory crackdown, which at one point reduced the sector's valuation by more than $2 trillion.
Why it matters
Tencent's recent gains, along with those of its rivals like Alibaba Group Holding Ltd., whose local shares have surged 85% in a comparable time frame, show an upbeat outlook among investors over China's pro-growth policies post-pandemic.