Ant Group files for IPO to boost payments capacity

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Valentina Vitali
Valentina Vitali
FXC Intelligence Research Analyst
Valentina is a Research Analyst at FXC Intelligence, the data sister company of FXcompared. Valentina is passionate about payments and fintech. Valentin enjoys analysing money transfer companies and… Read more
  • Ant Group, which is linked to the Chinese e-commerce company Alibaba, said that it would list its shares on both the Hong Kong and Shanghai exchanges.
  • It will build on its current online money transfer capabilities when it gets the cash from the IPO, and it will also boost its capacity for research.
  • The decision to file an IPO comes against a backdrop of significant geopolitical question marks, including the role of the Chinese government and its relationship with the US.

A Chinese firm associated with the e-commerce giant Alibaba has announced that it will list its shares on two major global stock exchanges.

Ant Group said that it would use the gains from the move to boost its international money transfers business.

It intends to put its shares on two major East Asian stock exchanges – one in Shanghai and another in Hong Kong.

The firm could end up valued at tens of billions of US dollars if the initial public offering (IPO) goes ahead.

From there, it could be valued well above US$225bn.

The firm said that it would provide extended online money transfer capacities with the cash it expects to raise.

It also says that it will invest heavily in research and development.

It publicised this information in a filing ahead of the IPO’s launch.

The move comes against a geopolitical backdrop that has held the interest of market watchers for years.

Earlier this year, the firm – along with another Chinese firm, Tencent – was told that it would face an investigation.

China’s central bank, which is an organ of the country’s government, is understood to be angry that the two conglomerates have significant power over the online money transfer market in China.

This fact was referenced in the IPO prospectus produced for the benefit of potential new shareholders who want to invest in the firm.

According to one press report, the prospectus in fact references this potential problem.

It claims that the Chinese government is taking steps designed to reduce the role of monopolies in the Chinese financial system.

Payments, it claims, have been just one part of a growing anti-monopoly perspective on the part of the Chinese government.

Insurance, lending and other financial avenues have also been affected, it claimed.

More broadly, the move could also contribute to the difficult trading and diplomatic environment between China and the US.

The US government under President Donald Trump has demonstrated its willingness to impose sanctions of various types on China, especially in relation to technology.

The firm again demonstrated that it was aware of this risk by highlighting it in its communications.

It said that the international money transfer services it offered could be at particular risk if US sanctions were to continue.

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