(Bloomberg) — The Trump administration’s move to ban U.S. residents from doing business with Tencent Holdings Ltd.’s WeChat app rippled through Chinese markets, erasing $46 billion from the Internet giant’s market value and sending the yuan to its biggest slump in two weeks.The U.S. president’s executive order, which also applied to ByteDance Ltd.’s TikTok, fueled concern that the deteriorating U.S.-China relationship will weigh on companies, economies and markets. Confusion over the scope of the order led to volatile trading on Friday, with Tencent plunging more than 10% before paring its loss to 6.8% at the midday break.Before Friday’s drop Tencent was worth $686 billion, making it the world’s eighth-largest company by market capitalization and bigger than Berkshire Hathaway Inc. Its huge size means it occupies a dominant position on global indexes. The firm accounts for more than 6% of MSCI Inc.’s developing nation gauge and 4% of its Asian Pacific measure.“The U.S. government is expected to follow up with more measures targeting Tencent,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “Tencent’s overseas expansion map now looks a bit uncertain, since some M&A deals, especially if its targets are based in the U.S., will face challenges.”Tencent ranked as the world’s biggest games publisher by revenue in 2019, according to Newzoo data. It also holds a large stake in Fortnite maker Epic Games Inc. and owns League of Legends developer Riot Games Inc.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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