Ant Group poised for record dual listings as US exchanges lose allure
Ant Financial poised for record dual listings as US exchanges lose allure
Published: Aug 26, 2020 10:03 PM

People visit the Ant Financial stand at an digital economy exhibition in Fuzhou, East China's Fujian Province on April 25. Photo: VCG

Chinese fintech giant Ant Group is on track for a record-setting dual listing in its home markets, observers said, and they anticipate the nation's stock exchanges will attract more local technology heavyweights amid China-US tensions.

The operator of Alipay, one of the most popular mobile payment solutions, submitted its prospectus to the Hong Kong Exchanges and Clearing (HKEX) and the Shanghai Stock Exchange simultaneously Tuesday. 

The fintech unicorn - in which Alibaba Group holds a 33-percent stake - plans to sell  30 billion shares through its dual listing in the Hong Kong market and the STAR Market in Shanghai. It didn't reveal the price range or the timeframe for the offering.

Ant Group didn't respond to a request for comment as of press time.

Ant Group is expected to raise about $30 billion in its dual offering, meaning it's set to beat Saudi Aramco's record $25.6 billion IPO in late 2019, Li Yongsen, director of the institute of financial research at the University of the Chinese Academy of Social Sciences, told the Global Times Wednesday. Saudi Aramco, the world's largest oil producer, pulled off the world's largest IPO, raising $25.6 billion in an IPO. 

Alibaba's $25 billion listing in New York in 2014 was the largest IPO prior to Saudi Aramco's offering.

Promising technology companies are favored by investors across the globe, meaning tech IPOs are highly valued in many markets, Li said. 

The STAR Market and the ChiNext board - where a registration-based IPO system is up and running - are expected to make technology shares a bigger part of the A-share market, he said. 

US tech behemoth Apple lately became the first US firm to top $2 trillion in market capitalization. By comparison, Kweichow Moutai is the most highly valued firm in China's domestic equity market. The Shanghai-listed distiller closed flat Wednesday with its market value totaling 2.2 trillion yuan ($319 billion).

A brisk pace in pushing for stock market deregulation, as shown by eased restrictions on daily price limits recently implemented on the ChiNext market, is boosting the allure of Chinese equity exchanges just as the US moves toward a regulatory toughening over US-listed Chinese firms, analysts said.

In a sign of deregulation in China, US investment bank JPMorgan will pay 7 billion yuan to take full control of its Chinese mutual fund venture, according to a statement on the Shanghai United Assets and Equity Exchange Tuesday.

The challenging fundraising landscape in overseas markets would lead to more listings in the Hong Kong, Shanghai and Shenzhen markets, according to Li.

The homecoming trend is heralding a period during which the two markets will increasingly diverge, US-based Ben Harburg, managing partner of Beijing-based venture capital firm MSA Capital, told the Global Times.

It will increasingly be the case that US-traded Chinese firms will either opt for a dual listing, or delist from the New York stock market and list in their home markets as a result of an unfortunate trend gripping the US, where a clearly defined framework is still not in place for foreign companies to operate, Harburg stated. 

He called for efforts on the part of China to turn its market into a goldmine for global businesses, capital and talent.