Fintech giant Ant Group wins approval from China’s securities regulator for jumbo IPO in Hong Kong
- The CSRC approval clears the way for the Hong Kong stock exchange to consider the Ant listing at a hearing expected to take place today
- CSRC approval shows Beijing’s commitment to Hong Kong’s role as an international financial centre, according to analysts
The Hong Kong stock exchange is expected to consider the Ant listing at a hearing later today, according to the people, who were not authorised to discuss the matter publicly.
The dual listing of the operator of China’s largest mobile payment app Alipay in both Shanghai and Hong Kong is expected to be one of the biggest offerings ever, surpassing the record set by Saudi Aramco’s US$29.4 billion IPO last year. Analysts have estimated the company could be valued at between US$230 billion and US$250 billion.
Hong Kong’s stock exchange typically waits for the CSRC to sign off on listing applications by mainland China companies before moving an IPO request to its listing committee for review.
Ant is an affiliate of e-commerce giant Alibaba Group Holding, the parent of the Post.
The Ant listing is an important shot in the arm for Hong Kong, particularly as China seeks to further open its domestic financial markets to foreign investors and develop neighbouring Shenzhen as a technology and financial hub.
“The CSRC approval of Ant’s IPO in Hong Kong indicates Beijing’s commitment to keep the city’s role as an international fundraising hub for Chinese companies,” said Clement Chan, managing director of accounting firm BDO, who has helped hundreds of mainland firms list in Hong Kong over the past few decades.
The establishment of Shenzhen as a hub for start-ups does not undermine Hong Kong’s role as a financial hub, he said.
“So far, Hong Kong remains the only Chinese city that has a free flow of capital,” Chan said. “International investors can feel free to invest in the city on Ant and other mega mainland IPOs.”
From the establishment of the Shenzhen Stock Exchange in December 1990 until September, 2,339 companies have raised US$193.45 billion.
Nearly the same amount of companies have listed in Hong Kong as Shenzhen during that period, but nearly 2.7 times more money has been raised in Hong Kong – about US$516.12 billion – according to data from Refinitiv.
Mainland companies now represents 80 per cent of market cap and turnover in Hong Kong.
The sponsors of Ant’s Hong Kong share sale are China International Capital Corporation (CICC), Citigroup, JPMorgan and Morgan Stanley, according to the prospectus that Ant filed with the Hong Kong stock exchange. CICC and China Securities are joint sponsors and underwriters of the Shanghai leg of the IPO.
Goldman Sachs and Morgan Stanley are among the global coordinators on the offering.
The offering comes amid sky-high tension between Washington and Beijing ahead of the November 3 US election.
The US State Department has submitted a proposal to add Ant to a trade blacklist, known as the entity list, which would make it more difficult for American companies to sell technology to the firm, according to a report by Reuters. US Senator Marco Rubio, a Florida Republican, has also called for the US to attempt to delay Ant’s IPO.