World’s Biggest Stock Market Debut and Authorities

Ant Group operates Alipay, which is the main online payment system in China. It is worth mentioning that Ant Group backed by Jack Ma, the billionaire founder of e-commerce platform Alibaba, was set to sell shares worth about $34.4 billion on Thursday. Based on the information provided by Shanghai authorities the group reported changes in the financial technology regulatory environment, leading to the suspension. Unfortunately, the stock market debut of Chinese tech giant Ant Group won’t take on Thursday due to that reason. The online was planning to make its dual listing this week.

Based on the information provided by Alipay, the total payments on its platforms in China for the year ending in June was $17.6tn.

Importantly, Jack Ma as well as two top executives were asked to attend a meeting with financial regulators on Monday. This is not the end of the story, as Ant’s online lending business faces more government scrutiny.

Interestingly, the Shanghai Stock Exchange identified major problems including Ant’s report of changes to the regulatory environment. As a result, Ant no longer met listing conditions or information disclosure requirements. Interestingly, the Hong Kong Stock Exchange then reported that Ant made the decision to suspend its planned listing.

It is worth noting that Ant was due to sell about 11% of its shares. However, the pricing valued the whole business at about $313 billion.

Ant Group and stock market

Interestingly, the previous largest stock market debut was Saudi Aramco’s $29.4 billion float last December. Importantly, but perhaps what Ant’s executive chairman Eric Jang and Jack Ma didn’t factor in is how ultimately, if the business is operating in China, it needs the blessing of Chinese regulators.

Interestingly, Jack Ma compared traditional banks to “pawn shops”, lauding the merits of the digital banking system instead. According to the billionaire founder of Alibaba and the largest controlling shareholder of Ant, the future lending decisions should be based on data, not collateral.

It is no secret that China is extremely supportive of Chinese companies. The government expects a degree of control over Chinese companies that a person would not normally see in other countries. People should take into account that Jack Ma’s digital empire is increasingly veering outside that circle of control. Importantly, suspending the listing may serve as a reminder of who is in charge of the process. Authorities should work with Ant Group to solve all problems as soon as possible.