Ant, Tencent fund platforms urge investors to keep cool heads amid stock market volatility

Name: What is Jack Ma’s Ant Group and how does it make money?
Uploaded: 2021-03-10T11:48:13.000Z
Duration: 3 min 4 s
Description: What is Jack Ma’s Ant Group and how does it make money?

As stock market volatility rises, mainland Chinese tech giants ask investors on their fund platforms to stay calm

Knee-jerk reactions could dampen investors’ returns and spell trouble for managers on their platforms

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A Chinese investor checks stock prices in his notebook while another views them on her mobile phone in Beijing. Photo: EPA-EFE

Enoch YiuandGeorgina Lee

Published: 7:48pm, 10 Mar 2021Updated: 10:29am, 11 Mar 2021

Mainland Chinese tech giants Ant Group and Tencent Holdings have written to investors urging them to keep cool-headed amid increased volatility in the stock market.

Ant Group’s Alipay, the most popular payment app in China with a billion users, issued a letter on the wealth management section of its app on Tuesday urging investors in the funds distributed on its platform to take a long-term view of the equities market rather than making hasty, panicked decisions.

Earlier this month Tencent pointed out to investors that risks are an inevitable part of the market, and that as such they should not overreact to price swings.

Investors should not make a judgement call based on the market performance, but instead think about how they should react to the current bout of choppiness, which has come amid elevated inflation expectations as the yield on 10-year US treasuries surged to 1.6 per cent, Alipay advised.

“As global liquidity is gradually [being] withdrawn, market volatility could really increase. But investors should face this with a calm mind, as volatility is the characteristic of the equities market and also a main driver of returns,” it said.

The call for calm came from a think tank under Ant Fortune, the online platform through which Alipay users can access over 6,000 investment funds. Alipay is operated by Ant Group, an affiliate of Alibaba Group Holding which owns the South China Morning Post.

A knee-jerk response, and placing too much focus on the short-term performance of equities could result in an investor “buying high and selling low,” said the think tank.

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What is Jack Ma’s Ant Group and how does it make money?