SINGAPORE (Reuters) – Chinese financial regulators have started early stage talks on a potential revival of Ant Group’s initial public offering (IPO), Bloomberg News reported on Thursday, citing people familiar with the matter.
The U.S. listed shares of Alibaba Group Holdings, which owns nearly one-third of Ant, rose up to 4% in pre-market trading on the report.
COMMENT:
DAVID MADDEN, MARKET ANALYST AT EQUITI CAPITAL, LONDON
“In the last couple of years there have been concerns that Chinese authorities have been keen on controlling businesses and people like Jack Ma. The revival of an Ant IPO suggests that authorities want to be seen as a bit pro-market and pro-business rather than in control.
“The crackdown on businesses to the lockdown in Shanghai and Beijing – both of those have been operating at the same time – and it sent a negative message to the international business community.
“They are rolling back on their crackdown to counterbalance the lockdown they’ve had. Any data out of China lately has been dreadful because of lockdowns and the last thing they want to do is compound that issue. In the next three to six months we are likely to see China’s crackdown unwound.
“Also, if you IPO a company, you only do it when you are confident the markets will be stronger again in three to 12 months down the line, so it suggests optimism on both sides.”
DICKIE WONG, KINGSTON SECURITIES, EXECUTIVE DIRECTOR, HONG KONG
“Now could be a good time for the Ant IPO to come back. The Chinese government needs something to encourage economic growth and there has been an easing in some regulatory policies that had been put in place for the tech sector. That indicates that the regulatory risk for this sector is not as big as it was before.
“The size of Ant and the IPO will have to be smaller than what was planned in 2020 because the market conditions have changed and cannot be compared to now.”
LOUIS TSE, WEALTHY SECURITIES, MANAGING DIRECTOR, HONG KONG
“There have been policies to rein in the tech companies which have had to listen to those orders. If Ant was able to carry out a successful IPO, I think that would be a trigger for a turnaround in sentiment for IPOs in Hong Kong and the broader market here too.”
(Reporting by Scott Murdoch in Hong Kong, Medha Singh in Bengaluru; editing by Carmel Crimmins)
