Alibaba finance foray a new trend
Banks and financial institutions face fresh challenges after the e-commerce giant buys a controlling stake in fund manager
Alibaba's planned purchase of a controlling stake in a fund management firm marks a new trend of internet firms making a foray into financial businesses, posing new challenges for banks and other financial institutions yet to fully embrace the internet era.
Zhejiang Alibaba E-commerce is acquiring a 51 per cent stake in Tianhong Asset Management for 1.18 billion yuan (HK$1.5 billion), Tianhong's second-largest shareholder Inner Mongolia Junzheng Energy & Chemical Industry said in a stock exchange filing on Wednesday. The deal is subject to approval by the fund manager's shareholders and the securities regulator.
If approved, it would turn Tianhong from a small fund manager into the largest on the mainland with 514.3 million yuan of registered capital, said Wang Qunhang, a researcher at Jian Financial Information's fund assessment centre in Beijing.
"Tianhong would also become the first fund manager whose largest shareholder is a private non-financial institution, marking the arrival of internet finance," Wang said.
Shares in Junzheng closed 10 per cent higher at 10.99 yuan yesterday, hitting the daily ceiling in Shanghai. Other firms with internet finance business also rose.
"Internet companies are accelerating integration with financial institutions," said Li Zichuan, an analyst at consulting firm Analysys Enfodesk.