Tencent And NetEase Surge After Chinese Regulator Pulls Draft Gaming Rules From Website
Portfolio Pulse from Benzinga Neuro
China's National Press and Publication Administration (NPPA) removed draft rules aimed at limiting video game spending and rewards from its website, leading to a surge in shares of Tencent Holdings Ltd (OTC:TCEHY) and NetEase Inc (NASDAQ:NTES). The removal suggests a potential revision of the rules, which had previously caused a market selloff and significant loss in market value for major gaming companies. The shift in regulatory stance could impact the future of China's gaming industry.
January 23, 2024 | 7:31 am
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POSITIVE IMPACT
NetEase Inc's shares increased by 7% after the NPPA's draft gaming rules were taken down, signaling relief and optimism among investors.
NetEase, as a major player in the gaming industry, stands to benefit from the regulatory rollback. The stock's increase is a direct consequence of reduced regulatory risk, which could have hampered the company's revenue and growth.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Tencent Holdings Ltd's shares rose by up to 6% following the removal of China's draft gaming rules, indicating a positive market response to the regulatory shift.
The removal of the draft rules by the NPPA is directly related to Tencent's business, as it alleviates concerns over potential restrictions on gaming revenue. The positive market reaction is reflected in the stock's price surge, suggesting investor confidence in Tencent's short-term prospects.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90