Regulators in mainland China and Hong Kong have cleared Ant Group’s plans for a blockbuster initial public offering in Hong Kong, kicking off a busy few months of capital raising in the city, according to people familiar with the situation. Ant, the operator of China’s largest mobile payment app by volume Alipay, applied for a dual listing in Hong Kong and Shanghai’s Star Market in August. China Securities Regulatory Commission followed by the Hong Kong stock exchange gave the green light on Monday for the offshore leg of the deal to proceed. China’s top securities regulator still needs to clear the Shanghai tranche of the offering, but the people familiar expect the paperwork to be signed off soon. Hangzhou, China-headquartered Ant will now ramp up the marketing of its shares to global investors, culminating in what is likely to be the world’s largest stock market debut. Ant and Hong Kong’s stock exchange declined to comment on the status of the application. Co-hosting such a jumbo IPO with Shanghai helps Hong Kong keep pace with the swift development of financial hubs in mainland China. Beijing is steadily opening its domestic financial markets to foreign investors and nurturing neighbouring Shenzhen as a technology and financial hub. On Sunday, the National Development and Reform Commission (NDRC) granted Shenzhen greater autonomy in 40 areas to boost its profile, including relaxing visa restrictions to attract foreign talent and start its own stock futures index. “The CSRC approval of Ant’s IPO in Hong Kong indicates Beijing’s commitment to keep the city’s role as an international fundraising hub for Chinese companies,” said Clement Chan, managing director of accounting firm BDO, who has helped hundreds of mainland firms list in Hong Kong. The deal also bolsters Hong Kong’s international standing at a time when fears are mounting that political tensions over the introduction of the National Security Law are eroding its attractions as a financial hub. Hong Kong is the world’s second-largest fundraising venue for companies so far this year, ranking only behind New York’s Nasdaq. Star Market is third globally and Shenzhen’s tech board, ChiNext ranks sixth, according to data compiled by Refinitiv. From the establishment of the Shenzhen Stock Exchange in December 1990 until September, 2,339 companies have raised US$193.45 billion. Nearly the same amount of companies have listed in Hong Kong as Shenzhen during that period. Still, Hong Kong has raised nearly 2.7 times more money – about US$516.12 billion – according to data from Refinitiv. Hong Kong still retains a significant advantage for mainland Chinese companies wishing to tap international capital: China’s closed capital account. “Hong Kong remains the only Chinese city that has a free flow of capital,” Chan said. Mainland companies now represent 80 per cent of market cap and turnover in Hong Kong. While Ant and its advisers are still gauging investors’ appetite for its shares, the impending IPO could peg the Alipay operator’s worth roughly between US$230 billion to US$250 billion, according to several estimates by stock analysts. Three large early investors in Ant value the digital financial ecosystem between US$240 billion and US$300 billion, according to people familiar with their thinking. Ant will list at least 10 per cent of its shares and is set to smash the record held by Saudi Aramco’s US$29.4 billion IPO last December as the biggest ever share offering, people familiar with the process said earlier. Hong Kong’s stock exchange gave Ant some feedback on its application, which the firm will respond to this week. Confirmation that the listing process is moving forward to expected to appear on the bourse’s website in the coming days, the people said. Ant’s investment banking advisers will soon be sending out research from their analysts to institutional investors, which they hope will hone analysis of Ant’s worth. The final yardstick will have implications for the market capitalisation of Ant’s major shareholder, Alibaba Group, the owner of the South China Morning Post . “The market is also assigning very little value to our stake in Ant Group. Well, since many of you want to invest in Ant, and you’re looking for allocations, you know the valuation and the market will soon tell the valuation,” said Maggie Wu, Alibaba Group’s chief financial officer during a presentation to investors day last month. Besides Ant, other blockbuster deals in the pipeline for the rest of this year in Hong Kong potentially include listings by digital drug retailer JD Health , detergent maker Blue Moon and more secondary listings by Chinese companies. Hong Kong is competing fiercely to land new deals and marketing its growing expertise in technology and biotech to would-be public-market debutants. Other listing venues are pressing their advantages as well. “US, Hong Kong and Star will all get their share of listings,” said John Lee, vice-chairman, head of Greater China at UBS Global Markets. The Swiss bank has advised on listings in mainland China, Hong Kong and the US recently. Deal flow will be supported by buoyant stock markets, albeit with bouts of turbulence prompted by high valuations and uncertainty surrounding the US election. The coronavirus pandemic has spurred many global central banks to launch asset-buying programmes, unleashing a record US$6 trillion into economies this year according to credit rating agency Fitch Ratings, some of which is finding its way into stock markets. The Federal Reserve signalled in September that US interest rates would stay near zero until at least the end of 2023. “This year, investors’ purse strings for IPOs are looser than 2019,” said Edward Au, a managing partner at Deloitte. A major theme in Hong Kong fundraising has been US-listed Chinese issuers seeking a secondary listing in Hong Kong. “Secondary listings theme will continue into 2021,” said UBS’s Lee. The Swiss bank worked on the secondary listings of Alibaba, NetEase and JD.com. US-listed Chinese companies are seeking to tap into the liquidity pouring into Hong Kong’s markets from mainland China and international investors seeking yield. More than HK$141.6 billion has flowed into the city since September 14, forcing the Hong Kong Monetary Authority, the de facto central bank, to intervene 30 times to try to weaken the Hong Kong dollar. The authority did not break down the origins of the inflow, but local brokers believe it is swollen by international investors preparing to participate in Ant‘s deal. Issuers are also using a secondary listing as a hedge on the deteriorating US-China relationship. Some Chinese companies could complete their applications for a secondary listing in Hong Kong by December, one of which is likely to be the Chinese web portal and social media firm Sina Corp. While not as big as Ant, other companies are waiting in the wings to IPO in Hong Kong, including JD Health, a health care unit of e-commerce giant JD.com, which is seeking up to US$3 billion and a December listing. Mainland laundry detergent maker Blue Moon is looking to raise up to US$1 billion. Property developer Sunac China’s spin-off management arm, Sunac Services, is also targeting a US$1 billion fundraising; while Shimao Services, a spin-off of developer Shimao Group, is hoping to fetch US$1.3 billion. Some issuers seeking to launch IPOs could delay marketing until November to avoid a direct clash with Ant Group’s launch. Mid-sized deals in the pipeline include Tencent-backed health care start-up WeDoctor , which is seeking up to US$800 million; and mainland pop toymaker and intellectual property manager Pop Mart is raising up to US$600 million as it targets an October listing. Investors will scrutinise listing debutants’ IPO prospectuses for evidence that they are continuing to grow and innovate despite the coronavirus pandemic that is buffeting economies. “Rather than size, what prompts us to subscribe to an IPO is whether the management could present a convincing growth outlook for the next three to five years,” said William Yuen, an investment director at US asset manager Invesco. Wall Street bank Morgan Stanley is leading the field of advisers so far this year, with a 16 per cent market share of equity capital markets business in Hong Kong. Goldman Sachs and China International Capital Co (CICC) are chasing it with an 8.6 per cent and 7.4 per cent share respectively, according to data from Bloomberg. The sponsors of Ant’s Hong Kong share sale are Citigroup, J.P. Morgan, Morgan Stanley and CICC. Meanwhile, Goldman Sachs and Credit Suisse are among the global coordinators on the bumper share sale. Meanwhile Bank of China International, Barclays and ICBC International are bookrunners, people familiar with the matter said. Ampere Partners is Ant’s financial adviser.