Tencent heading towards biggest fall in almost a year

CEO Pony Ma sells 20 million shares for HK$3.22bn.

Tencent Holdings Ltd. slumped for the first time in 10 days after billionaire Chairman Ma Huateng cut his stake in the operator of Asia’s most-popular message services.

The stock fell 4.4% to HK$163 at the trading break in Hong Kong, the most in almost a year. The benchmark Hang Seng index declined 0.5%.

Ma, China’s third-richest person, cut his stake to 9.65% from 9.86% and raised a combined HK$3.22 billion ($415 million), according to filings to the Hong Kong stock exchange Monday (http://bit.ly/1I8cBpt). Selling shares sent a signal to investors to withdraw from the stock after a 62% surge in the 12 months through Monday, Louis Tse, a Hong Kong-based director of VC Brokerage Ltd., said Tuesday.

“If the chairman of a company starts selling, it probably means the market could start taking a beating,” Tse said. “The market has risen so much, it was expected to come down at some point.”

Hong Kong’s benchmark Hang Seng index has surged 18% this year, reaching the highest level since December 2007. An unexpected drop in Chinese exports spurred speculation that authorities will increase stimulus to support economic growth.

Ma sold 10 million Tencent shares on Thursday at an average of HK$162.26 each and another 10 million shares on Friday at an average of HK$159.81 each, according to two disclosure filings to the Hong Kong stock exchange.

Tencent reported a jump in online advertising revenue during the fourth quarter, buoying the outlook for higher earnings from its WeChat and QQ messaging services. Net income for the three months ended December rose 50% as Tencent develops its advertising, payment services, online games and content streaming businesses.