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Tencent leads Asia300 in market cap growth

Tencent's market cap reached $213.5 billion at the end of June, up 15% from the close of 2015.

SHANGHAI -- Chinese technology group Tencent Holdings racked up the biggest six-month gain in market capitalization of any of Nikkei Inc.'s Asia300 companies, cruising ahead even as other internet-related names lost ground.

The shifting market values in the Asia300 -- 331 listed companies outside Japan representing the leading names in stock markets from South Korea to India -- suggests that investors are growing selective as economic growth slows, particularly in China.

Tencent provides WeChat, the free messaging software so widespread that it has become part of China's infrastructure, with more than 760 million users.

The company's market cap reached $213.5 billion at the end of June -- up $28.5 billion, or 15%, from the close of 2015. This made Tencent the 22nd-most-valuable company in the world at the time. Japanese leader Toyota Motor looked somewhat small by comparison at $164.4 billion.

Tencent surpassed Alibaba Group Holding in value for the first time and was closing in on China Mobile, which led the Asia300 in market cap at $234 billion.

Investors seem to like Tencent's growth potential. The company is trying for a bigger mobile gaming presence in China and abroad, says Ricky Lai, an analyst with Guotai Junan International in Hong Kong, pointing to its $7.3 billion acquisition of Supercell from SoftBank Group in a deal announced this June.

Tencent's fortunes may be rising, but other internet-related names in the Asia300 saw their market caps fall. Alibaba, China's biggest e-commerce company, lost $5.7 billion, or 3%, in value to slip to $198.4 billion. Second-ranked JD.com logged the sixth-biggest decline of $15.1 billion, or 34%. Investors appear worried about rising competition in Chinese e-commerce and other problems.

JD.com, which counts Tencent as a shareholder, continues to lose money as it puts investments in product delivery and other areas ahead of profitability to challenge its larger rival.

Alibaba has its own troubles, including, analysts say, slow progress on expansion beyond China. The company's revelation in May that its accounting methods were being probed by the U.S. Securities and Exchange Commission has also weighed on the share price.

Mainland- and Hong Kong-listed banks and life insurers stood out among the Asia300's market cap decliners. Bank of China and Industrial and Commercial Bank of China -- two of the "big four" Chinese state-owned commercial lenders -- ranked second and seventh in lost value. Investors are clearly worried about Chinese banks' pile of nonperforming loans, which loomed more than 40% higher at the end of March than a year earlier.

China Life Insurance suffered the biggest drop in market cap, $33.6 billion, with industry peer Ping An Insurance (Group) Co. of China following in fourth place. The benchmark Shanghai Composite Index fell nearly a fifth over the same six-month period, raising concerns about Chinese insurers' stock market exposure.

As with internet companies, Asia300 oil and gas names had their market cap winners and losers. China's CNOOC and Thailand's PTT had the fifth- and 10th-largest gains, while PetroChina placed third among decliners.

A rebound by crude oil has benefited PTT, Thailand's most valuable listed company, the bulk of whose earnings come from the transport and sale of petroleum and natural gas. Its shares have followed oil prices upward this year, adding $6.1 billion to its market cap -- the biggest gain among Thai companies in the Asia300.

PetroChina is burdened by stalled oil development projects in such conflict-torn countries as Sudan and Iraq. Meanwhile, prices have been slow to recover in its sizable natural gas business.

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