AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)
Markets

Ant Group's IPO sees record $3 trillion in retail demand

  • Ant’s dual listing is set to raise about $34.4 billion, split fairly evenly between Shanghai’s STAR Market and Hong Kong, topping Saudi Aramco’s $29.4 billion listing last December.
Published October 31, 2020

HONG KONG: Retail investors placed bids for a record $3 trillion of shares in Ant Group Co Ltd’s initial public offering (IPO), set to be the world’s biggest, as mom-and-pop savers bet on demand for its financial services in China.

Ant’s dual listing is set to raise about $34.4 billion, split fairly evenly between Shanghai’s STAR Market and Hong Kong, topping Saudi Aramco’s $29.4 billion listing last December.

Investors, both retail and institutional, are rushing to buy into Ant, which operates China’s biggest payments platform and other financial services, despite risks of greater scrutiny at home and abroad.

The Shanghai leg of the IPO drew about 19 trillion yuan ($2.8 trillion) of bids from retail investors, or 872 times the number of shares earmarked for them, a company filing to the stock exchange showed on Thursday.

The Hong Kong tranche got HK$1.3 trillion ($168 billion) in bids, or 389 times the shares on offer, said people with knowledge of the matter on Friday, declining to be identified as the information is not public yet.

The bookbuilding for the Hong Kong leg of the IPO of Ant, backed by e-commerce behemoth Alibaba, ran from Monday to Friday, while books for the Shanghai leg were open for one day on Thursday.

The $3 trillion of retail investor bids, equivalent to the gross domestic product of the United Kingdom, comes against the backdrop of shaky global markets ahead of next week’s U.S. presidential election and a dour global economic outlook.

Investors in the IPO, however, have brushed aside company-specific and broader market concerns on hopes that Ant will continue to benefit from the rapid digitization of financial services in China.

Harrison Chan, a 25-year-old financial professional in Hong Kong, spent 40% of his monthly income on applying for Ant shares, and is now wondering whether he will get any, given the large number of bids made.

“I am confident in the company’s future prospect because it is involved in many different businesses ... and they are all online services, which is the direction the world would be heading to, so I think its potential is huge,” Chan said.

‘PROMISING FUTURE’

Starting as a payments processor in 2004, Ant has built an empire in China by offering its users short-term loans that are credited within minutes, and selling insurance and investment products.

The unprecedented retail frenzy for Ant shares is backed by massive amount of margin lending by financial institutions, with brokerages in Hong Kong lending billions.

Hangzhou-based Ant decided to exercise a so-called greenshoe option to increase the share offer by 15% and is now selling a total of 1.92 billion shares on the Nasdaq-style STAR Market, according to Ant’s filing with the Shanghai exchange.

The company on Monday set the price of the Shanghai leg at 68.8 yuan ($10.27) per share. Before the greenshoe, it was offering 4% of the initial 1.67 billion shares to mainly retail investors across the country.

Retail investors’ enthusiasm towards Ant’s flotation has triggered a clawback mechanism, where their heavy over-subscription could result in them receiving a greater share, Ant said in the Shanghai filing.

“It’s a definite thing that one day a Chinese company will have the largest IPO ever but it just came quick,” said Beijing resident Ms Qin, 23, a consultant with one of the leading banks in China, declining to give her first name.

“This has very much to do with China’s growing economic size and its huge population contributes a lot to Ant’s businesses,” said Ms Qin, who has applied for Ant shares in Shanghai. “I am confidently investing in Ant due to its promising future.”

Comments

Comments are closed.