Home India News US News Videos Cheap Flights Hotel Booking Play & Earn Web Hosting Mock Test Filmybaap Contact Us Advertise Zordo Products

Tencent, NetEase shares rebound after China regulator's assurance on new rules

2 months ago 33



A mobile phone is displaying the screen of Tencent Games company's stock plunge in Suqian, Jiangsu Province, China, on December 22, 2023.

Costfoto | Nurphoto | Getty Images

Chinese online gaming stocks rose Wednesday, recovering some losses from the previous session after the country's top gaming regulator said it will "carefully study" the concerns of all stakeholders on draft rules aimed at curbing excessive online gaming and spending.

The draft guidelines from China's National Press and Publication Administration last Friday sank the Hong Kong-listed shares of Tencent, NetEase and Bilibili — among the largest players in the world's biggest online gaming market. The proposed rules are aimed at prohibiting incentivizing daily sign-ins for games, among other revenue-generating practices.

Stock Chart IconStock chart icon

hide content

NetEase shares rebound

On Wednesday, NetEase shares surged as much as 14% in early trading as Hong Kong markets returned from the Christmas holidays. The stock had plunged about 25% on Friday. Rival Tencent climbed almost 4.5% in early trading after shedding more than $43 billion in market value in Friday's rout.

Bilibili, a social media site that derived 17.1% of its total third-quarter net revenue from Chinese domestic gaming, climbed 2%. Its shares had tumbled about 10% on Friday.

On Saturday, China's top gaming regulator pledged to "carefully study" the concerns of stakeholders on the draft rules, particularly surrounding Articles 17 and 18, according to a WeChat statement.

Overhang remains

These two articles would ban online games from forcing players into duels with other players, while also requiring owners of online games to abstain from providing or condoning high-value or expensive transactions in virtual entities whether by auction or speculative activity, among other things.

Daily login rewards would also be banned, while recharging limits must be imposed with pop-up warnings issued to users who display "irrational consumption behavior," the National Press and Publication Administration said in the draft rules.

These latest draft rules come as the broader China technology industry was just emerging from a broader crackdown that started in late 2020.

Stock Chart IconStock chart icon

hide content

Tencent shares rebound

The National Press and Publication Administration, which controls the publication of new games, also said Monday that it approved more than 100 new domestic games, after saying Friday that it approved 40 imported games.

"We believe these fire-quenching measures may help to slightly ease market concerns, but they are not enough to remove the overhang caused by the draft regulation," Nomura analysts said in a Tuesday note.

— CNBC's Evelyn Cheng contributed to this story.

Read Entire Article