China crashes Naspers

Published: 2023-12-22 13:13 +02:00 by Agency Staff tag: Investment

Shares in Naspers and Prosus slumped on Friday after China issued new measures to limit players’ spending in videogames.

Shares in Naspers and its European-listed subsidiary Prosus slumped on Friday after China issued a raft of new measures that limit players’ spending within videogames, dealing a blow to the value of the company’s holding in Chinese internet giant Tencent Holdings. Prosus slid as much as 20% in Amsterdam trading, erasing €14-billion (R284-billion) of market value. Naspers also slumped by a fifth, while Tencent — in which Prosus holds a 25% stake — closed down 12% in Hong Kong. China’s gaming regulator on Friday published draft rules aimed at clamping down on practices that encourage players to spend more money or time in online games. A sweeping set of curbs on in-game rewards for frequent logins and purchases stoked fears of another industry crackdown in the world’s biggest mobile gaming arena. Prosus counts on Tencent as its biggest investment in a wide-ranging portfolio of technology stocks

According to Bloomberg Intelligence analyst John Davies, Prosus’s stake in Tencent leaves it sensitive to factors outside of its influence. The holding “casts a shadow over its other investments, and appears unlikely to change soon”, he said. Prosus’s stock performance is closely linked to that of Tencent, given that three-quarters of its sum-of-the-parts value lies within the Chinese conglomerate. The Dutch firm counts on Tencent as its biggest investment in a wide-ranging portfolio of technology stocks. Prosus has been trimming its investment in Tencent for more than a year to fund a buyback programme. The company said earlier this month that its ownership dropped below 25%. Read: Naspers profit doubles, e-commerce portfolio nears breakeven In Johannesburg, local benchmark the FTSE/Africa All-Share Index declined as much as 1.8%, with Naspers and Prosus the biggest drags on the market. — Henry Ren, (c) 2023 Bloomberg LP Get breaking news alerts from TechCentral on WhatsApp

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