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Tencent shares have nearly doubled in recent months as pressure from Chinese authorities eases.

Published: 2023-01-16

In October last year, the share price of the Chinese Tencent Holdings hit a low against the backdrop of a tough policy pursued by local authorities against representatives of the IT sector. Since then, the company's securities have risen in price by 96%, that is, almost doubled. This was facilitated by signs that the Chinese authorities are preparing to ease the pressure on the IT giants, as well as the gradual easing of restrictions that were introduced against the backdrop of the coronavirus pandemic.

Due to the resumption of funding within the industry and the launch of new products, Tencent shares have shown strong growth recently. This is also supported by statements by a number of Chinese politicians who have called for the lifting of some of the previously imposed regulatory restrictions on IT companies.

Beijing's permission to engage Ant Group Co. The $1.5 billion in funding is the clearest sign that Chinese authorities are softening their stance on regulation of the IT sector. Recall that the tightening of regulation of the IT sector began with an unexpected ban by the Chinese authorities on the initial public offering of Ant Group in 2020, under which the company planned to raise about $37 billion on the stock market. over $2 trillion in market capitalization.

However, Tencent shares have shown strong growth lately. Positive dynamics can also be seen in relation to Alibaba Group Holding Ltd., whose shares increased by 85% over the same period. This growth reflects investor optimism regarding further easing of restrictive measures in the country's IT sector and economic recovery after the coronavirus pandemic. Against this background, Tencent for the first time in the past six months entered the top ten most valuable companies in the world.