China’s tech crackdown leaves Naspers exposed as Tencent slides

Investing in a holding company with heavily discounted assets, such as South Africa’s Naspers, is one thing.

But if the underlying assets are themselves at risk, the equation changes. When those risks are driven by an ideologically led Chinese government crackdown on the tech sector, then the risks are opaque and hard to quantify.

Throw in the historically emotive language of “spiritual opium” being used in state-controlled Chinese media to describe computer games, and investors in South African tech conglomerate Naspers and European-listed vehicle Prosus, whose most valuable holding is their stake in China’s Tencent, face a dilemma over whether to head for the exit.

• Tencent on Tuesday said it would act to restrict access to its Honor of Kings game after state media singled out the game in its “opium” comment. That was enough to wipe $60b from Tencent’s market value.
• The mid-nineteenth