Source: Bloomberg | Editor: I knew Laoli
KONTAN.CO.ID – BEIJING. Chinese Government authorities warned Jack Ma and senior Ant Group Co executives that the fintech giant would face new restrictions on its expansion. This highlights the increasing regulatory risk for the world’s largest initial public offering just days before its trading debut.
Ma, one of Ant’s founders and one of China’s most powerful businessmen, was summoned to a rare joint meeting on Monday with China’s central bank and other top three financial regulators.
While neither party has disclosed details about what has been discussed, those with knowledge of the matter said the Ant leadership team was informed that the company would face increased scrutiny and be subject to similar capital and leverage restrictions as banks.
Some investors will be surprised by the prospect of more regulation given that China has started tightening the rules for Ant and other financial conglomerates. But the much-talked-about meeting could ease the frenzy surrounding the biggest stock market debut in history.
Also Read: Ant Group Initial Public Offering Will Renew These Records
Ant will start trading on Thursday after raising at least US $ 34.5 billion in an IPO that attracted more than US $ 3 trillion in orders from retail investors in Shanghai and Hong Kong.
“Regulatory risk is the biggest risk factor for Ant Group,” said Kevin Kwek, an analyst at Sanford C. Bernstein, in a note. Bloomberg, Monday (2/11).
“We think the news will only have a gradual negative impact on the listings and believe most investors will remain optimistic about Ant’s long-term positive outlook. Nevertheless, investors may revisit their growth assumptions given the clear signs of regulatory intervention, “he added.
Ant Chairman Eric Jing and Chief Executive Simon Hu joined Ma at the meeting, which included the banking watchdog, the China Securities Regulatory Commission and the State Foreign Exchange Administration, according to a CSRC statement on Weibo.
Also Read: High Institutional Investor Interest, Ant Intend to Close the Order Book Early
The release describes it as a “yuetan,” or regulatory warning.
Ant said in a statement that it would follow guidelines including stable innovation, surveillance and services to the real economy.
Ant has been hit by a new wave of regulations in recent months as China tightens controls over online lenders and companies operating across various lines of the financial business.
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Sumber : Bloomberg
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