Naspers tumbles even as Tencent quashes China crackdown fears

Tencent Holdings denied online speculation that it’s facing a major regulatory crackdown, issuing an unusually aggressive public response after fears of more tech-sector restrictions tanked markets on Monday.

Zhang Jun, Tencent’s head of PR, disputed a widely circulated post that suggested the company would weather another heavy blow from regulators in the near future. The account carrying the rumour has since been suspended, Zhang said on his semi-public WeChat feed.

“Ask me next time, at least that’s more legit. And I’m not afraid of going on record,” Zhang said, poking fun at the post citing an anonymous Tencent employee. Before its removal, the post was widely shared on Chinese social media and stock-trading forums. It hinted at another big step in China’s Internet crackdown, without providing specifics. Tencent closed 5.2% lower on the day.

The selloff also hit the South African bourse, with Naspers and its spinoff Prosus trading sharply lower. Naspers was off 5.4% at around 2pm on Monday, while Prosus was trading 4.7% lower in Amsterdam.

Chinese technology shares had their worst two-day drop since July due to renewed fears Beijing may roll out more restrictions for private enterprise. Traders pointed to everything from regulatory warnings over the weekend about scams in the metaverse — a virtual reality-based social media concept — to unsubstantiated talk about more curbs on the gaming industry. Tencent is a leader in metaverse development.

On Monday, a screenshot detailing the alleged new gaming curbs made waves on China’s Internet. But Wang Guanran, an analyst with Citic Securities, clarified that the content was originally posted by him last year when regulators hosted study sessions on gaming regulations.

“I didn’t post anything today,” he said on his WeChat. The screenshot flagged more oversight of violent genres and concepts like anime and religion and limits on player spending on loot boxes.  — Zheping Huang, (c) 2022 Bloomberg LP, with additional reporting (c) 2022 NewsCentral Media