Financial regulators on the Chinese mainland have given fintech giant Ant Group the green light to hold what is expected to be the world's largest IPO on the Hong Kong stock exchange, underscoring the central government's continued support for the city's financial market amid an intensifying US crackdown, experts said on Monday.
The China Securities Regulatory Commission (CSRC) has approved the Hangzhou-based company's plan for its listing in Hong Kong, paving the way for a dual offering in Shanghai and Hong Kong, according to a statement from CSRC on Monday night. The decision was issued on Friday, the statement said.
Ant Group declined to comment on the latest move when contacted by the Global Times earlier on Monday. The approval by the CSRC is a key step before Hong Kong regulators could move forward with IPO procedures for the mainland-based company, and the decision showed the mainland's support for Hong Kong to maintain its global financial hub status, experts said.
Following the CSRC's approval, the Hong Kong stock exchange was expected to hold a hearing on Ant Group's listing as early as Monday, according to the South China Morning Post.
"This move can consolidate and further develop Hong Kong's status as an international financial hub and further promote social, technology and economic development in Hong Kong," Liang Haiming, chairman of the China Silk Road iValley Research Institute, told the Global Times on Monday, adding that Ant Group's mega IPO could lead more high-quality mainland companies to seek IPOs in Hong Kong.
Ant Group, which is affiliated with e-commerce giant Alibaba, could raise as much as $35 billion from its dual listing in Shanghai and Hong Kong at a valuation of about $280 billion, according to Bloomberg. That would surpass Saudi Aramco's record $29 billion IPO last year.
The CSRC's reported approval also comes as the US has moved to crack down on Hong Kong following the implementation of the national security law for the city in what Chinese officials call blatant interference in China's internal affairs.
The US government was reportedly considering imposing sanctions on some banks in Hong Kong as part of its crackdown on the city. It has also been pushing to delist some Chinese companies from Wall Street, in what Washington calls a financial decoupling.
Liang said that with the mainland's support and through a series of internal reforms that make it easier for mainland companies to list, the Hong Kong stock exchange will attract more and more innovative companies from the mainland by becoming "China's NASDAQ."
Prior to Ant Group's blockbuster IPO, Alibaba Group, which is listed in the US, made a splash in November 2019, as it launched a secondary listing in Hong Kong, smashing the record for the largest IPO in Hong Kong for the year, raising as much as $11.2 billion in its debut.
Other US-listed mainland companies including NetEase and JD.com followed suit in launching secondary listings in Hong Kong this year, lifting Hong Kong's market to second place globally by the number of IPOs and third by IPO funds raised in the first half of the year, according to data from the Hong Kong Stock Exchange.
The green light for Ant Group on Monday also deals a direct blow to recent calls from anti-China US Republican Senator Marco Rubio for the US government to take measures to delay Ant Group's IPO.
"I think he is in over his head to think that the US can just go around and stop companies in other countries from seeking IPOs in their own home markets," a Beijing-based financial analyst told the Global Times on Monday, adding that the US' crackdown on Chinese companies actually puts the US market and investors at a disadvantage, as more and more companies will seek to list in the mainland and Hong Kong markets.