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JPMorgan Fund Cuts Tencent as Slowdown Hampers Comeback

Andres Guerra Luz

(Bloomberg) -- A top-performing JPMorgan fund focused on emerging-market stocks trimmed its bet on Tencent Holdings Ltd., selling shares of what was its largest holding in July as the Chinese technology company struggles to stage a comeback.

JPMorgan Chase & Co.’s $6.5 billion Emerging Markets Equity Fund, which outperformed 94% of peers this year, reduced its position in Tencent by 14% as of Oct. 31, data compiled by Bloomberg show. Shares of Tencent, the largest company in Hong Kong’s Hang Seng Index by market capitalization, fell to a nine-month low on Oct. 30. JPMorgan declined to comment.

Tencent has been trying to recover from 2018 losses after a nine-month Chinese freeze on game approvals gutted its most profitable business last year. Yet the stock dropped 16% in U.S. dollar terms from an April high as China’s economic slowdown weighed on efforts to revive growth. Even so, 50 of the 57 analysts tracked by Bloomberg recommend investors buy the stock.

While trimming its Tencent exposure, its fifth-biggest holding, the JPMorgan fund boosted wagers on Budweiser Brewing Company APAC Ltd., ITC Ltd. and Bank Rakyat Indonesia Persero Tbk PT, the data show. The fund also added 2% to its position in Alibaba Group Holding Ltd., currently its top holding.

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--With assistance from Sofia Horta e Costa and Stephen Tan.

To contact the reporter on this story: Andres Guerra Luz in New York at aluz8@bloomberg.net

To contact the editors responsible for this story: Carolina Wilson at cwilson166@bloomberg.net, Alec D.B. McCabe, Philip Sanders

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