Ant Financial Group presses “pause” button before listing — China aims to strengthen regulation to control financial risks

Looking back over the past two years, Alipay, a unit of China’s Alibaba Group, Ant Financial, has consistently held more than half of the global mobile payment market. Ant Financial’s future valuation is now in the spotlight due to the delay in listing.

On November 2, Ant Financial Group, which had just priced its shares and was about to go public in China’s A-share technology market, faced the last hurdle before going public. China’s Shanghai Stock Exchange has suspended the listing of Ant Financial Group due to joint supervision of the relevant authorities and changes in the fintech environment the company reported to be in, which may cause the company to fail to meet listing conditions or disclosure requirements.

Subsequently, Ant Financial Group stated that the simultaneous listing of H shares in Hong Kong would also be suspended. News of ant Financial’s IPO setback sent Alibaba’s U.S. stock price down 8.13% on Wednesday. Shares of Alibaba fell 7.5% in Hong Kong on Thursday, while U.S. stocks rose 1.6%.

Over the past decade, Ant Financial Group has changed the way Chinese people deal with money, the New York Times reported on its website Thursday. The company’s app, Alipay, has become an essential payment tool for more than 730 million users, as well as a platform for obtaining small loans and buying insurance and investment products. .

The New York Times reported that the China Banking Regulatory Commission (CIRC) on Monday released draft rules for the regulation of online small loans, which include higher capital requirements for loans and tighter controls on lending across provinces. The Shanghai Stock Exchange’s decision to suspend ant’s listing also noted that changes in the fintech regulatory environment could have a significant impact on Ant Financial. 

Chinese regulators have instructed Ant Financial Group not to go public until it meets the new capital requirements and other restrictions imposed on Chinese financial groups earlier this month, Bloomberg reported on Thursday. People familiar with the matter said Ant Financial would have to make changes, including a capital increase in its lucrative micro-lending unit, the report said. It is unclear how far Ant Financial will overhaul its operations to meet all of China’s new rules.

Claims to be the strongest in the history, the world’s largest IPO this year in the name of the Ant Financial Group, listed by press “pause” moment has caused universal attention, after all, the ant gold service group at the listed price, many investors to participate in the preliminary inquiry, the suspension of listing is not just about Ant Financial Group, also involves the vital interests of the millions of people.

Investors are widely concerned about the impact of Ant Financial suspension on foundations that plan to participate in strategic placements. In response to the relevant questions on ant Group’s suspension of listing, the customer service of Alipay said that due to ant Group’s suspension of listing plan in A+H, the part of the fund that originally planned to participate in the strategic investment in ant’s listing was also suspended accordingly.

Ant Financial Group has invested in more than a dozen fintech companies around the world that offer electronic wallet services. Electronic wallets allow users to store money and make digital payments without relying on bank accounts.

The reason for the joint supervision of Ant Financial Services Group is related to its financial attributes — although ant listed on the technology board, credit accounts for a very high percentage of its main business income, and analysts estimate that ant charges an average interest share of 30-40 percent on the loans it provides.

Ant Financial is co-regulated because of its financial nature, which inevitably brings to mind its “history of development”. Ant, who made his fortune in finance, is often discussed without its mobile payment platform with a total user of over 1 billion — Alipay. As the most concrete application tool of Ant Financial, Alipay is in the process of promoting the great reform of China’s financial infrastructure. Aipay has played an important role in promoting the great transformation of China’s financial infrastructure. It has eliminated cash and bank CARDS, and changed the financial habits of ordinary people to some extent.

The IPO of Ant Financial Group has been put on hold. According to 21st Century Business Herald, some investment bankers pointed out that ant Group is under joint supervision during the ipo period, and it is a major event after the ipo, so it should be required to make supplementary disclosure. After the supplementary disclosure, it can be listed again.

Reuters said the market view is that Ant Group’s relisting is expected to be delayed by about half a year after it was halted by the Shanghai Stock Exchange.

A spokesman for the China Securities Regulatory Commission (CSRC) said ant group’s decision to suspend the listing was made by the Shanghai Stock Exchange in accordance with the law and regulations.

In response to ant Financial’s suspension of listing, the China Securities Regulatory Commission (CSRC) decided to suspend ant Financial’s listing in line with the principle of protecting the legitimate rights and interests of investors, fully disclosing information transparently and accurately, and earnestly safeguarding the fairness and justice of the market. The Shanghai Securities Exchange of China (SSE) decided to suspend Ant Financial’s listing in accordance with the relevant provisions of the Registration Management Measures of the Science Innovation Board.

Ant Financial Group has pressed the “pause” button before going public. Many media outlets believe that China’s move is aimed at strengthening supervision and regulation to control financial risks and effectively safeguard the healthy and stable development of the financial market.