Type to search

Chart of the Day: China fintech sector still feeling the pain of Ant Financial rebuff

Alibaba unit’s fall from grace reflected in stock prices of other Chinese fintech firms, diverging from the advance of AF Global Fintech Index

(AF) China’s clamp down on Ant Financial, which scotched its hopes of a record twin IPO late last year, appears to be having a chilling effect on the stock prices of nation’s leading financial technology companies.

In November, Beijing pulled the plug on Ant’s massive IPO, which was set to raise $37bn. The move, which was accompanied by new rules that increased Ant’s funding for loans to 30%, followed comments made by Jack Ma, the founder of Ant parent Alibaba. 

Ma’s criticism of China’s banking regulators was followed not only by the pulling of the joint New York-Hong Kong share offering, but also the usually extroverted Alibaba chief’s disappearance from public view.

Since then the stock prices of financial data firm Hundsun (600570.SHG), Softbank-backed online-only insurer Zhong An (6060.HK), IT firm Hithink RoyalFlush (300033.SHE) and Suning Commerce (002024.SHE), have declined precipitously. Significantly they also began substantially underperforming the Asia Financial Global Fintech Leaders Index (GFL) {KOINTR}, which tracks the world’s leading finance technology firms.

As well as the heavy hand with which authorities dealt with Ant, investors may have also been deterred by China’s new Personal Information Protection Law, which will demand that internet companies set up “independent” agencies consisting of external members to process user data.

Mark McCord

Mark McCord is a financial journalist with more than three decades experience writing and editing at global news wires including Bloomberg and AFP, as well as daily newspapers in Hong Kong, Sydney and Melbourne. He has covered some of the biggest breaking news events in recent years including the Enron scandal, the New York terrorist attacks and the Iraq War. He is based in the UK. You can tweet to Mark at @MarkMcC64371550.


AF China Bond