What’s next for world’s largest fintech company after Chinese regulators trampled on Ant Group’s blockbuster stock sale?
- Ant may update regulators on how it would comply with new micro-financing rules
- Ant’s valuation is likely to fall as it is regulated more as a financial firm than a technology company, said analysts
The shock suspension on Tuesday of the largest stock listing in global finance has sent Ant Group’s management scrambling to align the financial technology giant’s lending business with China’s regulations to tamp down risk in the world’s second-largest economy.
The 16-year-old company based in the Zhejiang provincial capital of Hangzhou could submit additional materials and push onwards with its listing application in Shanghai and Hong Kong. What the world’s largest fintech company could look like – or be valued at when it re-emerges from its business revamp is the biggest question on investors’ minds.
“It does not serve the national interest for regulators to destroy the entire IPO,” said Howard Yu, a professor at IMD Business school who studies China’s internet giants. “It does send a dramatic signal that no one is too big to attack, and everyone’s commercial agenda has to align with the national agenda.”
At the heart of the sudden halt on the much-anticipated IPO are differing views within China on preserving financial security, especially how data privacy should be handled and if the widespread use of technology to assess credit risk is fail-safe, analysts said.