NetEase sinks 20%, Tencent 11% after China proposes new rules for online
Shares of Chinese NetEase Inc. and Tencent Holdings Inc. fell sharply on Friday after authorities announced draft rules to crack down on spending and rewards in online gaming.
In a statement, China’s National Press and Publication Administration, the top gaming regulator, proposed curbs on excessive spending on games by consumers, and bans on rewards from multiple logins and pop-up rules that would warn users against overspending on such games.
The draft rules also said content of any games should be prohibited from leaking “state secrets.”
Shares of NetEase
NTES,
9999,
tumbled 22% and Tencent
700,
fell 12% in Hong Kong trading, which weighed on the Hong Kong Hang Seng Index
HK:HSI,
down 1%. Tencent is the parent of Tencent Music Entertainment Group
TME,
The news comes as a blow for China shares, which are some of the worst performers in Asia and globally in 2023 — the Hang Seng is down 16%, and set for its fourth-straight losing year.
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