League Of Losers

Image source: Gorodenkoff - Shutterstock

What's going on?

Tencents stock fell by the most in a decade on Tuesday, after murmurs grew that the gaming industry would be next to fall to Chinas might.

What does this mean?

The Chinese government has been on the warpath in the last few months, barreling its way through the countrys tech, fintech, and for-profit education industries to name a few. So when a state-owned news outlet accused kids of spending too much time playing electronic drugs video games investors were suddenly nervous that gaming would be next. That encouraged them to sell off a host of the sectors stocks: Tencents shares dropped by 6% on Tuesday, NetEases by 10%, and Japans Nexon which makes about 30% of its revenue from China by 7%.

Why should I care?

For markets: This bruise might not heal.


Tencents shares were down as much as 11% at one point, but Chinas biggest public company did manage some damage control namely by promising to limit the amount of time kids can spend playing its games. But Alibaba which announced weaker-than-expected quarterly results on Tuesday is proof that this might cause lasting problems: the ecommerce giants shares have now fallen 25% in the last six months. Still, its trying to put a positive spin on the situation, committing to buying back more of its shares this year and next.



For you personally: Stay safe out there.


You might be skittish about investing in China right now, so its just as well that Goldman Sachs published new analysis on which sectors to avoid and which to invest in. The investment bank suggested steering clear of those exposed to antitrust, capital markets, social equality, and data security, and gravitating more toward consumer staples, energy and utilities, and machinery and materials.

Originally posted as part of the Finimize daily email.

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