Shock over delay to Ant group's IPO

(4 Nov 2020) Investors were considering the implications of a last-minute decision by Chinese regulators to suspend the planned trading debut for shares in Ant Group, the fin-tech affiliate of e-commerce giant Alibaba, after what was expected to be a nearly $35 billion initial public offering.
The decision late Tuesday caused the plans for trading in Shanghai and Hong Kong to be put off due to what the Chinese stock market watchdog said were "major issues" with Ant Group's regulatory compliance.
The last-minute decision was a belated realization of the threat Ant presents to traditional banks, according to Hong Kong market watcher Francis Lun.
News late Tuesday that the initial stock offering set for Thursday this week on Shanghai and Hong Kong exchanges, would be suspended, was a major shock.
Reviewing Ant's documents showed that its largest share of revenue came from micro loans, said Lun. That poses a challenge to state-owned traditional banks, Lun pointed out.
"Ant started actually trying to explore the edges of regulatory tolerance," he added, "It did not start as an approved payment system."
Lun also said it could be months before the governing body approve the IPO for the market.
Ant operates Alipay, the world’s biggest financial technology company and, along with Tencent’s WeChat Pay, one of two dominant electronic payment systems in China.
The company has come under increased scrutiny and tighter regulation as it expanded the range of financial technology services it offers.
Among the new regulations are caps on the use of asset-backed securities to fund consumer loans, new capital and licensing requirements and caps on lending rates.

Find out more about AP Archive: http://www.aparchive.com/HowWeWork
Twitter: https://twitter.com/AP_Archive
Facebook: https://www.facebook.com/APArchives
Google+: https://plus.google.com/b/102011028589719587178/+APArchive​
Tumblr: https://aparchives.tumblr.com/​​
Instagram: https://www.instagram.com/APNews/


You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/86dd9eb698be4638abdbe623861286c4