Tencent, NetEase shares rebound after regulators vow to improve proposed rules

By Jason Xue and Casey Hall

SHANGHAI (Reuters) -Chinese online gaming giant Tencent Holdings saw its shares stage a mild rebound on Wednesday, the first day of trade after regulators vowed to make improvements to proposed rules that had sent stock in gaming companies plunging.

Its Hong Kong-listed shares climbed 3% in morning trade after a 12% tumble on Friday. Hong Kong markets were closed on Monday and Tuesday for public holidays.

Rival NetEase shot up 14% compared with a 25% plunge on Friday, also helped by local media reports since Monday that it is again in talks to partner with World of Warcraft-maker Blizzard. The two companies abruptly parted ways a year ago.

Earlier this month, Blizzard China, the company’s Chinese subsidiary, published a post on China’s top micro-blogging site Weibo, saying that it is in talks with publishing partners in China to continue the game’s service in the country.

Chinese regulators announced on Friday a wide range of draft rules aimed at curbing spending and rewards that encourage video games, sparking fears that regulators were once again cracking down heavily on the sector.

But after shares in gaming sector stocks plummeted, there was an apparent softening in stance by China’s video game regulator – the National Press and Publication Administration – which released a statement on Saturday saying the government would further improve the proposed rules after “earnestly studying” public views.

And on Monday, the regulator approved new licenses for 105 domestic online games for December – a move some analysts said “strongly demonstrated” that authorities remain supportive of the development of online games.

(Reporting by Jason Xue and Casey Hall; Editing by Edwina Gibbs)