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(Bloomberg) -- Tencent Holdings Ltd. repurchased the most shares in nearly two decades after a selloff sparked by the tech firm’s addition to a US blacklist for alleged links to the Chinese military.
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China’s most valuable company bought back 3.93 million Hong Kong-listed shares on Tuesday, the most since April 2006, Bloomberg-compiled data show. It topped that just a day later, scooping up another 4.05 million shares. The stock is now down about a 10th since the Pentagon blacklisted the WeChat operator. Tencent said it will work with the Department of Defense to address any misunderstanding.
While Tencent has been stepping up efforts to increase returns to shareholders, the HK$1.5 billion ($193 million) single-day purchases signaled urgency to contain the fallout from the blacklist.
The company wasn’t the only buyer willing to step in during the selloff: Investors in mainland China snapped up HK$14 billion of Tencent shares via exchange links with Hong Kong on Tuesday, making it the most-purchased stock on the day.
“From the statement Tencent put out yesterday you can see that the company thinks the US decision is wrong and the share price response is irrational, which probably warrants a higher share repurchase amount,” said Vey-Sern Ling, managing director at Union Bancaire Privee.
“Still, geopolitical risks are heightened and brought to the forefront with this, and some investors will be put off.”
--With assistance from Julie Chien and April Ma.
(Adds Wednesday buyback in the second paragraph.)
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