Regulatory actions against Ant Group nerves investors – Shaun Rein

 

Shaun Rein

The massive US$34.5 billion IPO by Jack Ma’s Ant Group has been derailed by regulatory action, days before its listing, and that does not make the investors happy, says political analyst Shaun Rein at AP. The decision also might rattle Chinese entrepreneurs who were considering selling shares on their own country’s market, said Rein.

AP:

The planned market launch of Ant, spun off from Alibaba Group, the world’s biggest e-commerce company by sales volume, symbolized China’s rebound and added to a string of smaller offerings by biotech and other new companies. In an unusual move, it was due to trade in both Shanghai for mainland investors and in Hong Kong for international buyers.

A brief official announcement Tuesday cited regulatory changes. It gave no details, but authorities have tightened controls on lending by online finance platforms and raised the amount of capital they must have.

The abrupt action might make investors more cautious about China, said Shaun Rein of China Market Research Group in Shanghai, whose clients include hedge funds and institutional investors. He said they are left to wonder whether regulators were worried about risks or acted out of irritation at Ant founder Jack Ma, China’s richest entrepreneur, who publicly complained they hamper innovation.

“Whatever it is, it doesn’t make the system look good,” Rein said. “It makes a lot of global institutional investors more nervous about investing into China.”

Ant said Wednesday it will return subscription fees to investors, suggesting it might be some time before the company is allowed to offer shares to the public…

The decision also might rattle Chinese entrepreneurs who were considering selling shares on their own country’s market, said Rein.

“Until yesterday, every entrepreneur I talked to wanted to go public in the mainland, because they thought valuations would be better, and it might make them look better in front of the government,” said Rein. “Now, after Jack Ma, I’m not sure what they’re going to do.”

More at AP. 

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more political analysts at the China Speakers Bureau? Do check out this list.

What makes the Ant Group so valuable? – Shaun Rein

 

Shaun Rein

Jack Ma’s Ant Group is heading for the largest IPO ever with a value of US$35,5 billion. Shanghai-based business analyst Shaun Rein explains how the Ant Group became the largest fintech company ever to AP.

AP:

Alipay and WeChat Pay have helped make Chinese society virtually cashless, at least in big cities, with consumers and merchants alike relying on digital payments using their phones.

“Think of Alipay as Visa, MasterCard, Citibank, Fidelity… all rolled up into one,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “On the Alipay platform, you pay for things, you buy insurance, you buy wealth management. Your whole life revolves around Alipay.”

Walk into a supermarket in China and one would be hard-pressed to find a customer digging around for loose change to pay for groceries. Instead, cashiers scan a QR code on a customer’s smartphone to deduct money from their Alipay or WeChat Pay digital wallets. The transaction takes seconds.

In restaurants, groups of friends often split the bill by transferring money to each other using their digital wallets, similar to how the Venmo app is used in the U.S.

“Ant Group is so valuable because Alipay is used on a day to day basis by a billion people on all of their purchases,” said Rein. “The scale of fintech in China dwarfs the regular financial transaction potential in the United States.”

More at AP.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more fintech experts at the China Speakers Bureau? Do check out this list.