Tencent and Alibaba Look for Some Recovery After $140 Billion Wipeout During Trade War
The ongoing trade war between the United States and China has proven to be one of the most damaging economic events of the last decade. When two of the biggest economies in the world are engaged in a trade war, then the stakes are very high and eventually, it does hurt plenty of businesses. That has been found out in a hard way by Tencent Holding Ltd and Alibaba Group Holdings Ltd, the two biggest companies in China. It goes without saying that when a trade war of this nature takes place, then the largest companies almost always end up suffering.
That is exactly what happened with Tencent and Alibaba since the start of the trade war. During the period, the two companies ended up losing a combined market up of a stupendous $140 billion. However, it now seems that the Chinese behemoths are looking to engineer a turnaround. The damaging dumping of the shares of the two companies started around May when the talks between the two nations broke down and United States President Donald Trump imposed fresh tariffs.
However, it is also important to note that the two companies’ businesses are primarily concentrated in China and do not have a large exposure to the United States markets. Hence, experts believe that the two companies are all set to come back on track in the weeks and months to come. Tencent has managed to record growth of 27% in the latest quarter, while Alibaba managed to grow at a breakneck pace of 38% in the same period. The companies are back on track, but it remains to be seen how long it takes for them to claw back the value that they have lost in their stock over the past months. In addition to that, it should be noted that the trade war is not yet close to any resolution and could yet drag on for months as Trump gets ready to launch into his Presidential campaign.