Chinese regulators approved Ant Group’s Hong Kong leg of its USD 30 billion IPO on Sunday, according to the Financial Times. Ant Group, an Alibaba affiliate, is the world’s highest-valued financial technology company.
On Monday, the Hong Kong Stock Exchange listing committee gave the green light for Ant Group’s Hong Kong listing, paving the way for what is set to be the world’s biggest stock market debut.
In an effort to expand its emerging banking services, the FinTech giant initially filed for an IPO in both Hong Kong and Shanghai two months ago in August. The company, controlled by Chinese billionaire Jack Ma, would be the first Chinese company in a decade to list in both markets at the same time.
There has been speculation that Ant’s dual listings on the Hong Kong and Shanghai stock exchanges could potentially exceed Saudi Aramco’s December 2019 IPO record, when the petroleum company raised USD 25.6bn via their debut on Saudi Arabia’s stock exchange.
The company launched its Hong Kong virtual bank – the sixth in the city – just last month and applied for Singapore’s virtual bank licence in January earlier this year. It plans to offer a whole host of banking services to its customers through its Alipay app, including a digital robo-adviser, which will help users select a portfolio of investments after assessing the user’s risk appetite and investment horizon. Alipay, which currently serves over one billion users and 80 million shop owners, is China’s largest digital payment platform and processed USD17.5 trillion in payments last year – 25 times the total of PayPal’s transactions.
Ant Group has continued to push ahead with its IPO in recent weeks, despite rumours that the US government is exploring possibilities to get Ant onto the Commerce Department’s Entity List, a blacklist which restricts American companies from doing business with the companies or individuals on the list.
On Friday, Florida Senator Marco Rubio called on the US government to try and delay Ant’s IPO. “It’s outrageous that Wall Street is rewarding the Chinese Communist Party’s blatant crackdown on Hong Kong’s freedom and autonomy by orchestrating Ant Group’s IPO on the Hong Kong and Shanghai stock exchanges,” Rubio said in a statement to Reuters. It is unclear how Washington could postpone the listing of a Chinese company in Hong Kong or Shanghai.
Hong Kong has seen a recent swathe of IPOs from large Chinese businesses in the past year, including secondary listings by e-commerce giant Alibaba, e-commerce competitor JD.com, and technology firm Netease. These listings are a response to the rising US-China tensions.
Over 200 Chinese-based companies, including search engine giant Baidu and tech conglomerate Tencent, could follow suit in light of the Holding Foreign Companies Accountable Act, which threatens to delist foreign companies that do not comply with tightened audit regulations and was passed in May earlier this year.
China’s largest computer chipmaker, Semiconductor Manufacturing International Corporation (SMIC), also delisted from the New York Stock Exchange in June and debuted in Shanghai as China’s biggest IPO in a decade a month later.
Last month, Sina Corporation, the owner of popular Chinese microblogging website Weibo, and web search company Sogou Inc. announced that they would be delisting from the New York Stock Exchange and going private in multibillion-dollar deals. Sina will go private in a USD 2.59 billion deal with Beijing-based New Wave Holdings, while Sogou will go private in a USD 3.5 billion deal with Tencent Holdings.