Ant Group ready for A shares
More capital to flow into safe zones like China
Three decades after stock trading became available in the Chinese mainland, the nation’s expanding financial-savvy population is finally close to embracing a blockbuster IPO that could match the economy’s rising clout in the tech world, thanks to trend-defying efforts to broaden access to its financial market.
Chinese fintech giant Ant Group is a step closer to being traded in the mainland stock market, after gaining regulatory approval on Friday for an IPO on the STAR Market in Shanghai.
The offering, part of a dual listing that could become the world’s largest IPO of all time, underpins China’s intrepidness in the face of a deepening financial war with the US, market watchers said. They expect the COVID-19 pandemic that could last for years to drive more capital into safe zones, notably China, where the pandemic is contained.
In a statement on Friday, the listing committee of the STAR Market of the Shanghai Stock Exchange granted the listing.
The fintech behemoth’s Shanghai offering is expected as early as October, Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, told the Global Times on Friday. Ant Group exemplifies rare but premium options in the A-share market, Dong said.
With the regulatory breakthrough, A-share investors who have long enjoyed a tech-enabled lifestyle but can’t directly purchase shares in Alibaba, Baidu, Tencent, Meituan Dianping and Xiaomi – which typify the ubiquitous indigenous tech strength but have all opted for overseas listings – will soon be able to invest in these big tech names.
The stock linkups between the mainland and Hong Kong bourses allow retail investors to trade some of the tech stocks listed in Hong Kong, but only a tiny portion of A-share investors satisfy the eligibility criteria, that require an aggregate balance of not less than 500,000 yuan ($73,910) in individual investors’ trading accounts.
Ant Group, the operator of Alipay, one of the two most popular mobile payment apps in China – the other one being Tencent’s WeChat Pay – submitted its prospectus to the Shanghai Stock Exchange and the Hong Kong Exchange and Clearing simultaneously in late August.
The fintech unicorn – in which Alibaba Group holds a 33-percent stake – plans to offer 30 billion shares through its dual listing. The price range has yet to be revealed.
The dual offering could raise as much as $30 billion – meaning, it’s set to beat Saudi Aramco’s record $25.6 billion IPO in late 2019, according to Li Yongsen, director of the institute of financial research at the University of the Chinese Academy of Social Sciences.