QR codes for Ant Group Co's Alipay digital payment service , and Tencent Holdings's WeChat Pay. Beijing last week abruptly halted the initial public offering of Jack Ma's Ant Group, casting a shadow over his Alibaba business.TRADERS looking to cash in on the wild swings in Chinese Internet stocks this week are betting that the two biggest firms will run in opposite directions.
A strategy of matching a bid on Tencent Holdings with a short position on Alibaba Group Holding would have gained 13 per cent this month in Hong Kong, excluding fees and dividends. That would be the biggest monthly return since June. The so-called pair trade strategy combines opposing positions in stocks that are typically highly correlated.
Beijing last week abruptly halted the initial public offering of Jack Ma's Ant Group, casting a shadow over his Alibaba business. Meanwhile, Tencent's strong quarterly results and reassurance that it can navigate an uncertain regulatory landscape have helped boost its stock.