To The Moon

• $TENCENT(00700)$ slumped by the most since January 30 as Prosus unveiled a plan to sell another 96 million shares, worth about US$4.4 billion, to fund its stock buyback

• Buffett’s Berkshire Hathaway sold 2.48 million shares in BYD in Hong Kong to reduce its stake to 10.9 per cent

Hong Kong stocks weakened amid a HK$205 billion (US$26.1 billion) sell-off in Tencent Holdings and BYD as corporate insiders continued to cut their holdings. Alibaba Group and other tech leaders extended losses amid regulatory scrutiny on ChatGPT-like services.

The Hang Seng Index lost 0.9 per cent to 20,309.8. The Tech Index tumbled 1.9 per cent and the Shanghai Composite Index of onshore equities ended the day with a 0.4 per cent gain.

Tencent slumped 5.2 per cent to HK$357.20 and EV maker BYD declined 2.3 per cent to HK$222.60, erasing a HK$186 billion and HK$19 billion from their respective market value. JD.com retreated 3.5 per cent to HK$153 and Alibaba slipped 3.3 per cent to HK$96.05 while Baidu lost 0.9 per cent to HK$134.

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Tencent suffered the biggest drop since a 6.7 per cent sell-off on January 30. Amsterdam-listed Prosus said on Tuesday it will deposit 96 million shares into the clearing system in Hong Kong this week for trading. The block, about 1 per cent of Tencent’s share capital, is worth about US$4.4 billion at current market price.

Prosus, which owns more than a quarter of Tencent, raised US$7.2 billion in 2022 by selling 193.4 million shares of the Shenzhen-based WeChat operator to fund its own stock repurchase programme.

The insider selling “affected the trends in other large tech stocks, which is the main reason for the market downtrend today,” said Kenny Ng Lai-yin, a strategist at Everbright Securities.

BYD tumbled after Warren Buffett’s Berkshire Hathaway sold again, trimming its holding by 2.48 million shares in the world’s top-selling EV maker on March 31 at an average price of HK$217.67 each, according to a filing. The sale reduced its stake in the Hong Kong-listed shares to 10.9 per cent from 11.13 per cent.

The Hang Seng Index has declined 0.4 per cent this month, bringing the losses since the January 27 peak to 10.5 per cent. The market has struggled amid a mixed bag of China data, worries about a US recession, and capital flight from the city as the Federal Reserve extended its policy tightening drive.

The Hong Kong Monetary Authority on Tuesday intervened in the currency market for the fourth time this year to defend the local currency peg. The market now expects the Fed to raise its key rate by 25 basis points next month, which could further widen the rate differentials in favour of US dollar assets.

Most Asian markets advanced. The S&P/ASX 200 in Australia added 0.5 per cent and the Nikkei 225 in Japan jumped 0.6 per cent while the Kospi in South Korea gained 0.1 per cent.

source：investing