Chinese market regulators have shocked investors by stopping the float of Ant Financial two days before the $US37 billion IPO was to happen on Hong Kong and Shanghai markets.
The move to halt the world’s biggest IPO in 2020 shocked analysts and others, but with markets focused on the US, there was no fallout.
There’s likely to be a big fallout in Chinese mainland markets on Wednesday, especially Shanghai and in Hong Kong, even as markets track the US election results.
It is an enormous blow to the financial technology firm founded by billionaire Jack Ma (who controls the hige Alibaba online marketplace) who is the world’s richest person.
Analysts said the move was over how ANT should be regulated – as a tech company like Ma wanted, or as a financial group, as the regulators had wanted – they won.
It was also seen as a way of the Chinese Communist Party reining in the country’s billionaires by humiliating Ma with the regulatory attack.
Reuters reported that the halt followed a meeting with China’s financial regulators on Monday during which Ma and his top executives were told that Ant’s lucrative online lending business would face tighter scrutiny.
“The Shanghai bourse described Ant’s meeting with financial regulators as a “major event” which, along with a tougher regulatory environment, disqualified Ant from listing,” Reuters reported.
“In China, analysts interpreted the move as a slap-down for Ma, who had wanted Ant to be treated as a technology company rather than a highly regulated financial institution,” the news agency said.
