Another good day for Naspers

Technology Correspondent

Naspers shares rose again on the JSE, driven by a perceived softening of gaming restrictions in China, a big piece of business for its biggest earner, Tencent.

This week, gaming regulators in China took down draft rules to control spending on video games from its website. The National Press and Publication Administration, which oversees China’s video game industry, had devised rules that would limit the amount of money and time people spent playing video games.

On Tuesday the draft rules were found to have been taken down from its website, indicating a possible about-turn on the proposal.

China is the world’s biggest online gaming market, with Tencent being the world’s largest video games company, responsible for titles such as Honor of

Kings and PUBG Mobile. The Chinese internet giant also owns large game developers, including Riot Games and Epic Games, the makers of Fortnite.

The market cheered the “signal” from the National Press and Publication Administration, Tencent shares jumping as much as 6.1% to HK$278.20 on Tuesday.

This helped to push up shares for Naspers and Euronextlisted subsidiary Prosus. On Tuesday, Naspers shot up 4.5% to R3,030, while Prosus added 3.84% to R556.67.

The momentum continued on Wednesday, with Naspers gaining 4.8% more by 2pm and Prosus about 4%. In Hong Kong, Tencent’s shares closed the session 3.6% firmer. Naspers shares are almost 10% firmer over the past five days.

Tencent has been reeling from a crackdown on Chinese technology firms, which has hurt its gaming unit over the past few years. The new gaming rules in China would have limited in-game purchases, including cracking down on incentives such as daily log-in rewards. A pop-up warning players of “irrational” spend had also been proposed.

Prosus lost almost a fifth of its value in 2021, wiping off more than R400bn as investors continued to worry about the safety of their capital in the Asian country.

With China and its erratic regulatory regime having hurt the group’s prospects in recent years, it has turned much of its attention to the world’s secondmost populous country, India, where Naspers has been a big tech investor for more than a decade. Movements in China remain the biggest driver of sentiment and price moves in the group’s stock.

By the JSE’s close Naspers was up 5.28% to R3,190 and Prosus 3.42% to R575.70.