Written by 5:00 am EU Investment

FirstFT: Tech titan Tencent pivots from investment buyer to seller

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Good morning. Chinese internet giant Tencent is pivoting from years of aggressive stakebuilding to focusing on divestments as it comes under pressure from investors and Beijing’s recent crackdown on Big Tech.

As part of an important shift in strategy, the company has outlined a soft target of divesting about Rmb100bn ($14.5bn) of its $88bn listed equity portfolio this year, according to two people familiar with the matter.

Partial divestments in large Chinese companies such as food delivery service Meituan were in the pipeline, the people said. Tencent owns more than 10 per cent of six large listed Chinese tech companies and is the biggest investor in Meituan, short-video sharing app Kuaishou and popular question-and-answer site Zhihu. Cutting its stakes could help reduce pressure on Tencent from China’s anti-monopoly regulator, the people said.

Beijing’s tech crackdown has led to nearly 100 deals involving Alibaba and Tencent coming under antitrust scrutiny, reversing authorities’ once laissez-faire approach towards the country’s vast internet sector.

Investors have also pressured the company to divest underperforming assets as China’s zero-Covid policies and property crisis batter the economy. Tencent reported its first decline in quarterly revenues in August, marking a departure from its days of double-digit growth.

Thank you for reading FirstFT Europe/Africa — Gary

1. Pound posts worst month since Brexit referendum Sterling has recorded its steepest monthly decline against the dollar since October 2016, falling 4.5 per cent in August to $1.16 amid a deteriorating outlook for Britain’s economy, an energy crisis and political uncertainty. The pound also declined almost 3 per cent against the euro.

2. Truss rules out new taxes Liz Truss, the Conservative leadership frontrunner, vowed never to introduce new taxes as prime minister in the 12th and final party hustings yesterday. She said that if elected she would prefer to slash taxes rather than introduce “handouts” to tackle the cost of living crisis.

3. EU rips up Russia visa deal The EU has agreed to suspend a visa deal with Moscow and backed demands by eastern member states to curb the number of Russians crossing into their countries, punishing ordinary travellers over Vladimir Putin’s invasion of Ukraine.

4. Binance expands free trading to include ether The world’s biggest cryptocurrency exchange by volume is ramping up efforts to secure market share and lure back clients following this year’s market crash by offering free trading in ether — the second-biggest digital token — ahead of an upgrade to the ethereum blockchain, where transactions in the popular token are recorded.

Column chart of Monthly spot trading volume $bn showing Binance dominates market for trading cryptocurrencies

5. China’s carbon emissions fall as growth slows Carbon emissions in China fell almost 8 per cent in the April-to-June quarter compared with last year, the sharpest decline in the past decade, reflecting a dramatic slowing in economic growth caused by large-scale lockdowns and a crisis in the property sector.

The day ahead

Economic data S&P Global releases August manufacturing purchasing managers’ indices for the EU, Germany, Italy, France, Spain, the UK and the US. July unemployment data is out for the eurozone and Italy, which also has second-quarter GDP. Germany publishes July retail sales. The US has July construction spending and weekly jobless claims, while in the UK, Nationwide releases its August housing survey.

European Medicines Agency meeting The regulator reviews Moderna and BioNTech/Pfizer’s boosters that were adapted to target the Omicron variant. The US approved Omicron-specific vaccines yesterday.

Corporate earnings Athletic apparel retailer Lululemon, US semiconductor manufacturer Broadcom, food processor Hormel Foods and beverage giant Pernod Ricard report results.

Schools return Most British schools return after the summer holiday. In China, Shanghai reopens all schools after months of Covid-19 closures.

Biden to condemn ‘extreme’ Republicans In a primetime address from Philadelphia tonight, US president Joe Biden will portray the Republican party as extremist, hypocritical and captive to Donald Trump’s influence ahead of November’s midterm elections.

European Premiere League transfer window closes Chelsea has a net spend of more than £200mn on six confirmed signings as the transfer window officially closes today. Premium subscribers can click here to sign up for Scoreboard, our newsletter on the business of sport.

What else we’re reading

What are the EU’s options to curb electricity prices? As European Commission president Ursula von der Leyen examines a gas price cap and an overhaul of energy markets, the Financial Times answers core questions about Europe’s energy crisis, explaining how the market works, why prices are so high and what the EU can do to cut costs — as well as the risks.

‘Don’t Pay’ energy bill protest gathers steam As fears mount about Britain’s energy crisis — with a public health expert warning of a “humanitarian crisis” of children suffering respiratory problems from living in cold, damp housing — grassroots movement Don’t Pay is hoping to amass 1mn people to cancel their direct debit energy payments on October 1.

How Dana White made the UFC Over the past two decades, Dana White built the Ultimate Fighting Championship into a $4bn company that made more than $1bn in revenue in the past year. The foul-mouthed, art-loving pacifist did it by cursing at press conferences, threatening ­adversaries and publicly trashing the weaknesses of his workers, the fighters.

Self-driving cars have nothing on Japan’s self-captaining ships The global race to perfect fully autonomous operations for large commercial vessels is intense, and arguably of far greater practical importance, than that for self-driving cars, writes Leo Lewis.

Why intellectual humility matters Intellectual humility can be thought of as a willingness to recognise our own cognitive limitations and biases, and to be more interested in understanding the truth of an issue than in being right. A lack of it can make some people believe in conspiracy theories and false news reports, writes Jemima Kelly.

Film

The 79th Venice Film Festival opened with Adam Driver and Greta Gerwig in White Noise, director Noah Baumbach’s canny adaptation of Don DeLillo’s novel and a post-Covid satire about an “airborne toxic event”.

Adam Driver poses for a selfie at the Venice Film Festival
Adam Driver poses for a selfie at this year’s Venice Film Festival © Ettore Ferrari/EPA-EFE/Shutterstock

Disrupted Times — Documenting the changes in business and the economy between Covid and conflict. Sign up here

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