Making money: what the experts think
● Ant music
Hong Kong may be reeling from a political storm, but there’s no escaping the gung-ho mood on the city’s stock exchange, said Hudson Lockett and Thomas Hale in the FT. Profits at HKEX hit a record high in the first half of the year “as the prospect of forced delistings from US bourses encouraged Chinese tech groups to list billions of dollars of shares in the city”. Indeed, HKEX is now the “most valuable stock exchange in the world”. The good news is that the bonanza looks set to continue, said The Economist. This week, Ant Group, the financial services arm of Chinese e-commerce giant Alibaba, filed for a joint IPO in Hong Kong and Shanghai. The company, controlled by Jack Ma, is reportedly planning to sell around 15% of its shares in an offering that would value it at more than $200bn. The $30bn it hopes to raise would rival the record sum raised by the Saudi oil company Aramco’s IPO in 2019.
Super-app
“Many in the West won’t have heard of Ant,” said Peter Hoskins on BBC Business, but its Alipay “super-app” is “China’s dominant mobile payments business” – used monthly by more than 700 million people and 80 million businesses to make mobile payments, invest in mutual funds, buy insurance and pay bills, according to the FT. Ant’s valuation rests on Alipay’s continued “dominance” – hence, perhaps, the repeated warning in the prospectus about the “regulatory risk” to its business. But the Chinese authorities are likely to look benignly on a launch that will provide a major boost to Shanghai’s “nascent Nasdaq-style exchange”, known as the Star Market, said Jing Yang in The Wall Street Journal. If all goes to plan, expect lift-off for Ant in October.
Lumbering up
Gold prices may be hovering around record highs, but a “less eye-catching asset” continues to “outshine” it, says Tom Rees in The Daily Telegraph. The year’s best-performing commodity to date is the “humble wooden log”. The price of lumber futures has more than doubled in 2020 due to “buoyant demand” amid a lockdown DIY boom, and “low stock levels made worse by mill shutdowns”. Lumber is now at a record high of more than $850 per thousand board feet – having made “quadruple” the gains of gold.