- Ant Group considers folding its online financial businesses into a holding company.
- The holding company will be regulated like a conventional financial firm.
- It is unclear if online payments platform Alipay will be a part of the holding company.
Ant Group Co Ltd plans on folding consumer lending and the majority of its other online financial operations into a holding company. Sources also confirmed on Tuesday that the said company will be regulated much like a conventional financial firm.
It is yet to be revealed if Alipay – the online payment platform that generates the 2nd highest revenue for Ant Group will also be a part of the holding company. The fintech firm refrained from commenting any further on the news at this stage.
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The proposed changes to Ant’s businesses, as per the anonymous sources, have not yet been finalised and might be revised later on. On Sunday, parent Alibaba Group Holding Ltd. (NYSE: BABA) raised its share repurchase programme from £4.44 billion to £7.41 billion.
According to the Wall Street Journal, China intends to get a broader stake in the business empire of billionaire Jack Ma. It is, however, unclear which of the companies is the government considering.
China’s regulator suspended Ant’s IPO in November
In a statement on Tuesday, the People’s Bank of China (PBOC) highlighted that Ant boasts several financial institutions, including insurance firms and securities on its portfolio. In compliance with the law, it should establish a holding company for better regulatory supervision.
The news comes only days after China’s Central Bank had urged Ant Group to shake up its consumer finance operations, including lending. Last month, regulators had suspended the payments giant’s £27.41 billion IPO that could have been the world’s largest on record.
Ma’s fintech empire has been under heavy scrutiny in recent months after the billionaire entrepreneur publicly criticised China’s regulatory policy that he said impeded technological innovation.
Alibaba’s performance in the stock market
The U.S. listed shares of Alibaba opened about 4% up on Tuesday and gained another 3% later in the day. Including the price action, the company now has a per-share price of £175.60 versus a much lower £130.65 per share in late March when the Coronavirus pandemic weighed on its business. Alibaba had started the year 2020 at £162.83 per share.
The NYSE-listed shares of Alibaba performed largely upbeat in the stock market last year with an annual gain of more than 55%. At the time of writing, the Chinese e-commerce giant is valued at £473.62 billion and has a price to earnings ratio of 31.79.