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Tencent's giant rally is a problem for some China investors

Bloomberg Published on Fri, Sep 08, 2017 / 12:33 PM GMT+8

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TAIPEI/SHANGHAI (Sept 8): When it comes to China’s biggest technology stocks, some investors are finding there can be too much of a good thing.

Take Shi Bin, a portfolio manager at UBS Asset Management (Hong Kong) Ltd. One of the top stocks in his UBS (Lux) China Opportunity equity fund is Tencent Holdings Ltd., which has soared 70% this year. So far, so good. But it’s hard competing with the likes of the MSCI China Index because he is hobbled by regulations that restrict funds’ allocation in any single stock to 10%. Tencent’s MSCI China weighting is 16.3%.

“We were lucky to have beat the index,” Hong Kong-based Shi said in an interview during a visit to Taipei. “It would be a real headache for us if Tencent shares continue to surge, as it’ll be difficult to find better bets.”