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• Ant Financial ahead of the largest IPO in history
• Double listing planned in Hong Kong and Shanghai
• Antitrust investigations could thwart Ant Financial’s plans
Ant Financial share ahead of mega IPO
The leap onto the trading floor of Alibaba trainee Ant Financial has been expected for a long time, now more and more details about the IPO of the mega fintech are slowly seeping through. This should actually be brought about by the end of 2017, but various circumstances ensured that the initial public offering was postponed indefinitely – until now. Because now it looks as if the IPO of Ant Financial should be completed this “September or October”, as Chinese media report with reference to insiders. But that’s not all: As the Chinese financial news agency Caixin reported, the financial services provider is aiming for a record amount of 30 billion US dollars in the IPO. It would be the largest IPO in the world. So far, the Saudi oil giant Saudi Aramco holds the record with an IPO that poured 26 billion US dollars into the coffers.
The Alibaba subsidiary is planning to sell 10 percent of its shares when it leaps onto the trading floor. Ant Financial is currently valued at approximately $ 200 billion. Another special feature is the planned double listing of the shares on the Hong Kong Stock Exchange as well as the STAR-Board Index of Shanghai, which is based on the US tech value index NASDAQ Composite.
Ant Financial is primarily known for maintaining the online payment processor Alipay and was split off from the Alibaba parent in 2014. Nevertheless, the e-retail giant still holds 33 percent of the fintech.
Antitrust investigation thwarted Ant Financial’s IPO plans?
However, there is one downer with the upcoming IPO: As reported by the Reuters news agency, the Chinese central bank is considering initiating a cartel investigation into Alipay and Tencent’s WeCat Pay, according to circles. The question is whether the two providers of digital payments are exploiting their market power. The investigations against the operators on the part of the Chinese antitrust authorities would now last more than a month. However, it is unclear whether the concerns will actually lead to a cartel investigation. Should that happen, it would be groundbreaking for the Chinese digital payments market.
According to Reuters, it had transactions worth around $ 8 trillion in the last three months of 2019. Consultancy agencies on site estimate that Alipay accounts for 55 percent of the market, WeChat Pay has around 39 percent market share. According to Reuters estimates based on Alibaba’s balance sheet report, Ant Financial made around $ 2.2 billion in profit in the fourth quarter of 2019. In addition, Alipay has 900 million users in China. In order to enable smaller providers to get involved in the market, the central bank announced last year that it wanted to standardize the interoperability of QR code transactions. Alipay and WeChat Pay also mainly use QR codes to enable payment transactions. It remains to be seen whether any antitrust investigations will lead to shifts in the market for digital payments. According to Reuters, Ant Financial and Tencent would do everything possible to prevent it from happening.
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