The Hang Seng Index dropped 1.7 per cent to 16,340.41 at the close, extending the decline for the week to 2.7 per cent. The Tech Index slumped 4.4 per cent, capping the biggest loss since February 10. The Shanghai Composite Index fell 0.1 per cent.
Tencent plunged 12 per cent to HK$274, the biggest drop since October 2008, while NetEase crashed 25 per cent to HK$122, the most on record. The two command about 9.1 per cent weighting in the Hang Seng Index and 14 per cent in the Tech Index. Elsewhere, Bilibili lost 9.7 per cent to HK$80.30 while Kuaishou slipped 7.2 per cent to HK$50.10.
The National Press and Publication Administration said online game players should not be rewarded for logging in daily and all games should set top-up limit and warn users about irrational behaviours, according to a draft published on Friday. Game servers must also be stored in China, it added.“The market is panicking and people do not know where the policy direction is,” said Dickie Wong, executive director at Kingston Securities. “The regulatory uncertainty has been a drag for the past few years and investor already lacked confidence in the market. The new rules undermined their expectations for recovery.”
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China limits online gaming time for young people to 3 hours a week
China limits online gaming time for young people to 3 hours a week
China’s video-game industry, the world’s biggest, is poised to grow 14 per cent to 303 billion yuan (US$42.7 billion) in revenue this year, the highest since data began in 2003, according to the Game Publishing Committee of the China Audio-Video and Digital Publishing Association.
China last tightened rules in mid-2021 amid a tech sector clampdown by restricting playing time for youth and minors, sending the market into a tailspin and erased more than US$1 trillion of market value of Chinese tech stocks.“The new rules will shatter the business models for companies that rely on mobile and internet games,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai.
Today’s losses compounded a year of misery for local shares. The Hang Seng Index has declined 17 per cent this year, making it the worst performer among major world benchmarks. Global funds stayed bearish on China’s outlook, even as valuation at 5.6 times earnings multiple ranks as the cheapest among them, according to Bloomberg data.
Limiting the losses, BOC Hong Kong gained 0.7 per cent to HK$20.55 and peer HSBC rose 0.9 per cent to HK$61.80.
The People’s Bank of China will maintain “reasonable” credit growth to create sound financial conditions to sustain economic recovery, it said in a statement on Thursday. Meanwhile, ICBC, Construction Bank and their peers lowered deposit rates from Friday, according to state-run China Central Television.“Lower deposit rates should help alleviate pressures on net interest margins and lay the groundwork for the PBOC to cut its policy lending rates in January, which have been left unchanged for the past four months,” said Lu Ting, chief China economist at Nomura in Hong Kong. “If these cuts materialise, it would signal Beijing has become increasingly concerned about the downward pressure on growth.”
Four companies made their debuts in Hong Kong today. Gold producer Persistence Resources added 1.8 per cent HK$0.56, while drug maker HighTide Therapeutics rallied 7.7 per cent to HK$12.38. Logistics provider FAR International surged 11 per cent to HK$1 and tea producer Pu’er Lancang Ancient Tea tumbled 19 per cent to HK$8.70.
In Shanghai, Hsino Tower Group, which makes steel towers for power queues, surged 341 per cent to 7.49 yuan on its first day of trading.
Major Asian markets were mixed. Japan’s Nikkei 225 climbed 0.1 per cent, while South Korea’s Kospi and Australia’s S&P/ASX 200 both slipped less than 0.1 per cent.
Additional reporting by Xinmei Shen
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