Ant Group’s dual IPO success may lure more Chinese companies for domestic filing, says GlobalData

Following the news that Ant Financial Services Group (Ant Group) plans to raise US$30bn through IPOs on Shanghai’s STAR Market and Hong Kong Stock Exchange;

Swati Verma, Senior Analyst of Thematic Research at GlobalData, a leading data and analytics company, offers her view.

“Fintech company Ant Group, which runs Ant Financial, will achieve the largest IPO in the history if it succeeds in raising US$30bn through a dual listing. For Ant Group, it’s a case of being in the right place at the right time. GlobalData’s analysis reveals that digital payment companies have recently been successful in capital raising. Moreover, China has emerged as a leading market for IPOs and will provide the right platform for the listing.

“GlobalData believes that the themes which drive the IPO market and the success of IPOs are based on the investor returns generated. The company’s report, IPOs in the Global Technology, Media, and Telecoms Sector – Thematic Research, states that between 1 January 2018 and 30 June 2020, fintech was one of the themes that generated the highest IPO returns for investors. This trend is likely to continue and Ant Group will be warmly received by stock markets, with the company targeting a valuation of US$225bn.

“China has emerged as the leading IPO market despite its volatile relations with the US. As geopolitical tensions intensify between the countries, the US is tightening its policies for the listing of overseas companies. This has resulted in big Chinese tech companies, including Alibaba, JD.com, and NetEase, returning home for secondary listings. In 2019, the country launched the STAR Market, its equivalent of the Nasdaq, which aims to boost domestic investment in technology, media, and telecoms (TMT).

“If Ant Group’s listing succeeds in breaking the record for biggest-ever debut, currently held by Saudi Aramco, it will be a notable achievement for China’s stock exchanges and will lure more Chinese companies to IPO domestically.”

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