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Tencent Gains $26 Billion After U.S. Reassures on WeChat Ban

Tencent Holdings Ltd.  Jumped the most in two weeks after White House officials said to have assured American businesses that the WeChat ban would not be as broad as feared.

WeChat's owner rose as much as 4.2% in Hong Kong on Monday after people familiar with the matter said the Trump administration was particularly seeking reassurance from US companies, including Apple Inc. They can still handle the WeChat messaging app from Tencent in China. In recent days, senior administration officials have reached out to some businesses, realizing that the impact of a widespread ban on the popular app could be devastating for technology, retail, gaming, telecommunications, and other industries from the United States, according to People.

The company's management earlier this month sought to reassure investors that the executive order signed by President Donald Trump on August 6 can only apply to WeChat operations overseas. The ban, which came amid efforts by the White House to curb the rise of Chinese-owned tech giants like Huawei Technologies Co. and TikTok owner ByteDance Ltd., had erased nearly $ 66 billion off Tencent's value, although today's rally means the stock has recouped all of those losses except $ 22 billion.

TENCENT HOLDINGS LTD

Spreads on Tencent's dollar bonds due 2030 tightened 2 basis points, according to credit traders in Hong Kong on Monday morning, the highest number since Aug. 11.

Trump ignited a furor after signing the order banning US entities from doing business with WeChat. Confusion reigned as investors wrestled with the pervasive language of Trump's order, which prohibits "transactions" with the Chinese company, leaving the door open for the administration to expand beyond service in the United States. Shares of Apple fell amid concerns that the move would hurt iPhone sales in its largest market after the United States.

However, risks remain until the details of the executive order are finalized. One person said that senior administration officials deliberate on the scope of the ban ordered by Trump, and the president could ultimately overrule what they decide.

Even if corporations are permitted to do business with WeChat, people can still face restrictions on using the app in the US A group of WeChat users in the United States filed a complaint at federal court in San Francisco on Friday. in an effort to prevent the Trump administration from enforcing the app's ban, saying it would violate their rights.

Also Read: Digital payments market in India likely to grow 3-folds to Rs 7,092 trillion by 2025

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