Yesterday, while much of the investment world’s attention was focused elsewhere (see below) those with peripheral vision were reminded Communist China tolerates free enterprise only because of its superior ability to create wealth and jobs. The Party’s blocking of the imminent Ant Group listing was also a warning to Naspers that its 31% investment in Tencent carries considerable “China” risk. Naspers’s price dropped 4% on the news.
Also read: Jack Ma’s Ant Group gears up for $200bn blockbuster IPO, amid US anti-China sentiment
Much of South East Asia had been abuzz ahead of Thursday’s proposed listing in Shanghai and Hong Kong of the Ant Group, fintech arm of Chinese giant AliBaba. The IPO was billed the biggest in history with a projected valuation of $280bn. Many Chinese have joined in the action, helped by funders willing to provide up to 20 times leverage to those borrowing to apply for shares.
Ant Group owns AliPay which forms half of the duopoly (with Tencent’s WeChat) dominating Chinese payments. There is little reason to carry cash in Chinese urban areas as virtually all financial transactions are handled electronically. AliPay’s share in this vast and growing market made its proposed IPO so popular the company did not bother to underwrite its fund raise, nor secure cornerstone shareholders – relying solely on demand from retail investors.
___STEADY_PAYWALL___
Also read:Â Alec Hogg: Resources to help you follow Trump v Biden
But everything is now on hold after Alibaba founder Jack Ma, Ant Group’s chairman Eric Jing and CEO Simon Hu were summonsed to a meeting by four regulators – China’s central bank, the country’s Securities and Exchange Commission, its Banking Regulator and the Chinese Adminstrator for Foreign Exchange. The Shanghai and the Hong Kong Stock Exchanges swiftly suspended the proposed listing. All of which sends a clear message: in China, even if the business cat is an expert mouse catcher, its very survival depends on bureaucratic whim.
For your attention today…
FOR DOWNLOADING…
* The latest episode of The Alec Hogg Show features Mmusi Maimane and is now available for downloading. Well timed, too, as it’s a year since the former DA Leader resigned to return to grass-roots activism. As you’ll hear, his One South Africa movement is gathering momentum ahead of next year’s local elections. Apart from the story of an unlikely emergence to fame, the Maimane podcast reminds us the Constitutional Court ruling on the Electoral Act will redraw SA’s political playing field. While others seem to be relaxing in the fast ending status quo, Maimane is preparing for a very different future ….Here’s the link:Â https://www.biznews.com/undictated/2020/11/03/mmusi-maimane
DOWNLOAD THE FREE BIZNEWS.COM APP
Click on the links below to download your own Biznews.com App:
Apple:Â https://apps.apple.com/za/app/biznews-com/id1517392839
Android:Â https://play.google.com/store/apps/details?id=com.goodbarber.biznews&hl=en
