Ant’s IPO is ‘a sign of the times’ and ‘not an isolated case’

The suspension of Ant Group’s initial public offering (IPO) is a sign of the times, according to seasoned investor Mark Mobius, founder of Mobius Capital Partners.

Ant, an Alibaba subsidiary of Jack Ma, was ready for a double listing of $ 34.4 billion in Shanghai and Hong Kong last Thursday.

Ant operates Alipay, one of China’s most popular mobile payment systems. It also provides everything from wealth management to microloans, and sells FinTech to businesses.

But the fintech IPO, which would have been the largest on record, was pulled at the last minute after Chinese officials said there were “major problems” with the listing.

“The Chinese government is realizing that it cannot allow those companies that dominate a particular industry and in particular the financial sector,” Mobius said during a virtual panel at CNBC’s East Tech West conference.

“I think the Chinese government stepped in because it realized it had to regulate these companies, so that they didn’t get too big,” he said, adding that other markets emerging countries had the same concerns. “A lot of it has to do with privacy and other factors.”

When asked if he thought Ant was an isolated case, Mobius replied “certainly not” and warned that the Chinese government may seek to further regulate the tech industry.

“As you know, this sector in China has developed by leaps and bounds,” he said. “And now I believe the government realizes that it cannot let this get out of hand because it will put the whole financial structure at risk.”

Speaking on the same panel, Douglas Flint, chairman of asset manager Standard Life Aberdeen, said the suspension of Ant’s IPO indicated the need for central banks and regulators to monitor stability. financial.

He pointed out how many of today’s payments, money transfers, and investments are online.

“While this is good for consumers and good for competition and good for reducing the cost of intermediation, I think regulators and policymakers are starting to get nervous given the extent of dominance that could occur.” , did he declare. “I think there is a financial stability issue that caused the IPO to be withdrawn.”

While China seems worried that some companies are getting too big, it wants to quickly expand others in different sectors.

Fiona Frick, CEO of asset manager Unigestion, told the same panel that China wants to become “more independent” in certain areas of technology, citing the semiconductor industry as an example.

Going forward, she said her business was more positive in emerging markets, especially Asia, than it was in Europe. “They handled their Covid crisis much better than us,” she said, adding that she was particularly positive about the technology in those countries.