Naspers and Prosus dashed hopes of a Santa rally on the JSE on Friday, as combined they shed about R375bn from their market capitalisation after Chinese regulators announced plans to tighten control of the gaming market.
Most of the main JSE indices were higher, while global markets were mixed in a short trading session ahead of the Christmas long weekend.
The share prices of global internet and media company Naspers and its global arm Prosus plunged the most on record after Chinese regulators announced the plans, which hurt tech giant Tencent and others in the sector.
In a set of proposed guidelines, the National Press and Publication Administration, China’s gaming regulator, said it would curb excessive consumption, referring to time and money spent on games, the Financial Times reported.
China’s President Xi Jinping’s administration has sought to clamp down on online gaming addiction, including restricting hours and the ages of those allowed to play.
Reuters reported shares in Tencent, the world’s biggest gaming company, tumbled as much as 16% at one point, while those of its closest rival, NetEase, plunged as much as 25%. Gaming accounts for about 30% of Tencent’s revenue.
Naspers fell 17.7% to R2,742.35 and Prosus lost 17.39% to R493.15.
The JSE all share index lost 1.37% to 74,379.57 points and the top 40 fell 1.78%. Banks rose 1.95%, financials 1.76%, SA listed property 1.7%, industrial metals 1.25% and resources 0.74%.
Sentiment in the market is still being driven by expectations that the US Fed will cut interest rates, potentially as soon as March. The market has stuck to that conviction despite pushback from central bank officials.
Reports on Thursday painted a mixed picture of whether the Fed can pull off a slowdown in the economy powerful enough to conquer high inflation but not so strong that it causes a recession, reported Bloomberg.
November data for US personal income, consumer spending and the personal consumption expenditures (PCE) report are due to be released at 3pm on Friday.
The core PCE, which excludes volatile food and energy prices is expected to come in at 3.5% over the past 12 months, according to economists polled by Bloomberg.
“Friday’s big number is the PCE price index, which is the Fed’s preferred inflation indicator, which will give markets a catalyst for the coming days,” said TreasuryONE currency strategist Andre Cilliers.
The rand struggled for direction “as thin liquidity and the squaring of short dollar positions ahead of the Christmas long weekend hit the currency”, said Cilliers.
At 12.52pm, the rand had weakened 0.29% to R18.4123/$, 0.29% to R20.2711/€ and 0.6% to R23.4108/£. The euro was little changed at $1.016.
Gold gained 0.48% to $2,055.44/oz and platinum 1.1% to $973.62/oz. Brent crude was 0.83% firmer at $79.98 a barrel.
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