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Naspers and Prosus shares tumble 13% on Tencent woes

FILE PHOTO: A sign of Tencent is seen during the third annual World Internet Conference in Wuzhen town of Jiaxing

FILE PHOTO: A sign of Tencent is seen during the third annual World Internet Conference in Wuzhen town of Jiaxing

Published Mar 14, 2022

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TECHNOLOGY firms Naspers and Prosus shares were 13 percent lower at midday today after its stake in Chinese firm Tencent took a hit.

Prosus holds Naspers’s global internet business, including a nearly one-third stake in Tencent.

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Tencent extended losses to close more than 10 percent lower after the Wall Street Journal reported it faces a record fine for violating Chinese anti-money-laundering regulations.

By 1pm, Naspers was trading at R1 552.70, while Prosus was at R753.01.

The People’s Bank of China found Tencent’s WeChat Pay had allowed the transfer of funds for illicit purposes such as gambling, the newspaper reported, citing unidentified people familiar with the matter.

It said WeChat Pay was judged non-compliant with other rules that required Tencent to identify users and merchants transacting on the platform.

Tencent also took a knock as Shenzhen, China, where Tencent is based was placed under a hard lockdown as Covid-19 cases surge.

Reuters reports that adding to investors’ concerns over the regulatory environment, China’s cyberspace regulator issued a new set of draft measures today aimed at protecting minors, demanding that online gaming, livestreaming, audio and video platforms set up a “youth mode” for minors.

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The development further dented the already fragile sentiment in tech names, with the Hang Seng Tech Index shedding 11 percent in its biggest intraday plunge to touch a new low.

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