(Bloomberg) — China’s raft of new measures limiting players’ spending on video games sent ripples through stock markets across the globe on Friday.
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Prosus NV fell as much as 20% in Amsterdam trading, erasing €14 billion ($15 billion) of market value, after the regulator’s draft rules dealt a blow to the value of the company’s holding in Chinese internet giant Tencent Holdings Ltd. South African parent Naspers Ltd. also slumped by a fifth.
In Hong Kong, Tencent — in which Prosus holds a 25% stake — closed down 12%, while rival NetEase Inc. tumbled 25%. The Hang Seng Tech Index of Chinese tech companies fell 4.4% to the lowest level since November last year.
Ubisoft Entertainment SA, which Tencent invests in, fell as much as 8.3% in Paris trading, while US peers including Unity Software Inc., Roblox Corp. and Electronic Arts Inc. declined in premarket.
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 log-ins and purchases stoked fears of another industry crackdown in the world’s biggest mobile gaming arena.
Prosus’s share-price slump shows that it’s sensitive to factors outside of its influence, according to Bloomberg Intelligence analyst John Davies. Its Tencent stake “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 program. The company said earlier this month that its ownership dropped below 25%.
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.
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