Alibaba Stock Turns Negative as China Regulator Denies Ant IPO Rumors
2022.06.09 14:15
Alibaba (BABA) Stock Turns Negative as China Regulator Denies Ant IPO Rumors
By Senad Karaahmetovic
China Securities Regulatory Commission said that it’s not considering Ant Group’s IPO revival after Bloomberg News reported that authorities are taking steps to support Ant in going public.
The regulator said it supports eligible platform companies to list overseas.
Bloomberg previously reported that Chinese regulators are holding talks over a potential re-launch of Ant Group’s initial public offering (IPO), marking a major U-turn by the authorities following a nearly two-year-long crackdown on tech companies.
Accordingly, the China Securities Regulatory Commission (CSRC) has formed a new team to explore options to revive Ant’s share sale plans. Furthermore, the fintech giant is also close to obtaining a long-anticipated license that would allow it to launch an IPO and make the company more regulated like a banking institution.
Chinese regulators are considering Ant’s plans to list its shares in Shanghai. Ant would ultimately carry out a dual listing in Shanghai and Hong Kong, with the company recently appointing a former Hong Kong stock exchange Chairman Laura Cha as its independent director.
Authorities have approved Ant’s new appointment and have also accelerated their decisions on the company’s revamp proposals.
Although the timeline for Ant’s IPO remains subject to regulators’ approvals, the move would mark a clear sign of progress that is likely to restore investor confidence in the Chinese private sector, which has been battered over the past years.
Ant Group being allowed to go public would be “a sign that regulators are following through on their pledge to end the crackdown on tech platforms,” according to Bloomberg Intelligence analyst Marvin Chen.
“Potential revival of the Ant IPO may also help support financial markets in the region as fundraising activity has dried up this year,” adds Chen.
Shares of China-based technology companies have been on the rise over the past few weeks, partly driven by reports that the government is ending its investigation into the ride-hailing giant Didi Global (NYSE:DIDI) and restoring its key apps to mobile app stores.
Shares of Alibaba (NYSE:BABA), which owns a roughly 33% stake in Ant Group, are down 3.5% in pre-open Thursday after initially rising 5% on a Bloomberg report.
