The world’s largest stock sale by Ant Group draws a record amount from nearly 1.5 million retail investors, , on October 30, 2020 at 9:30 am

By ILP
On 10/30/2020
In Financial News
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The world’s largest initial public offering (IPO) is breaking records in Hong Kong’s stock market history and soaked up more than half of the money in circulation as investors spent an unprecedented amount of cash to win a piece of the world’s biggest online payments company.Almost 1.5 million retail investors put in HK$1.3 trillion (US$167.7 billion) in Ant Group’s retail offering in Hong Kong as of 11am local time, according to people familiar with the matter. That amounted to 394 times over the initial number of shares on offer, they said. The ratio is likely to increase further after the book closure at 12:30pm, they saidGet the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.The IPO has already mopped up more money than the stock sale by Chinese bottled water producer Nongfu Spring’s HK$677.7 billion. The number of mom-and-pop investors in Ant Group will also exceed the record when 970,000 people submitted bids for the shares of the Industrial and Commercial Bank of China (ICBC) in 2006, according to stock exchange data.Jack Ma’s Ant Group has a record high number of investors and subscription money for its IPO closes on Friday noon. Photo: Bloomberg alt=Jack Ma’s Ant Group has a record high number of investors and subscription money for its IPO closes on Friday noon. Photo: Bloomberg”The offering is so hot that more than 1 million retail investors have sent their subscriptions,” said Louis Tse Ming-kwong, managing director of Hong Kong-based brokerage Wealthy Securities. “It is a historic moment for Hong Kong’s securities market.”Retail investors submitted a record 19.05 trillion yuan (US$2.85 trillion) in subscription money for Ant’s share offering on the Star Market, a board of technology stocks in Shanghai. It amounted to 872 times oversubscription, the firm said in a Shanghai exchange filing late on Thursday.Ant Group offered 1.67 billion shares each in Hong Kong and Shanghai to raise about US$34.5 billion, making it the world’s biggest IPO. Including a 15 per cent overallotment in each leg, the total size of the IPO will increase to US$39.67 billion.Strong demand from individual investors in Hong Kong will trigger a mechanism where the retail allocation is raised to a maximum of 10 per cent, from the initial 2.5 per cent.Investors are buying the shares as the valuation is deemed cheaper than overseas payment companies, said Hong Kong Securities Association chairman Gordon Tsui. Ant is the operator of Alipay and an affiliate of Alibaba Group Holding which owns this newspaper.”Investors believe in the future economic and technological growth of mainland China,” Tse of Wealthy Securities said. “There is an increasing number of people using digital payment. Ant may have more upside room to go if it expands Alipay to overseas markets.”Ant Group began taking orders from retail investors in Hong Kong from Tuesday. HSBC, Bank of China (Hong Kong), other retail banks and the city’s 600-odd brokerages have made available as much as HK$500 billion of margin financing loans to help investors fund their subscription, more than double the capacity for Nongfu Spring’s IPO.”We have seen record levels of IPO applications and IPO loan uptake for Ant Group,” HSBC said in a statement. The lender set aside HK$150 billion of loans for its customers to subscribe to the shares at an interest rate of 0.48 per cent to 0.88 per cent. How retail investors can increase their chances of getting a piece of Ant Group’s blockbuster IPO in Hong KongThe frozen IPO liquidity, however, has not driven up local interest rates substantially, with the one-month interbank offered rate or Hibor rising to 0.48 per cent on Thursday from 0.13 per cent a week earlier. The current level is still lower than 2 per cent in March.Part of the reason is the presence of hot money in the system. More than HK$383.51 billion has entered the local financial system since April, according to HKMA statistics, forcing it to intervene more than 85 times to keep the Hong Kong dollar from breaking the stronger end of its trading band.The inflows pushed the aggregate balance, or the amount of cash sloshing in the banking system, to a record HK$457.46 billion on Friday, or more than eight times the level before the HKMA’s currency-market intervention.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.,

The world's largest stock sale by Ant Group draws a record amount from nearly 1.5 million retail investorsThe world’s largest initial public offering (IPO) is breaking records in Hong Kong’s stock market history and soaked up more than half of the money in circulation as investors spent an unprecedented amount of cash to win a piece of the world’s biggest online payments company.Almost 1.5 million retail investors put in HK$1.3 trillion (US$167.7 billion) in Ant Group’s retail offering in Hong Kong as of 11am local time, according to people familiar with the matter. That amounted to 394 times over the initial number of shares on offer, they said. The ratio is likely to increase further after the book closure at 12:30pm, they saidGet the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.The IPO has already mopped up more money than the stock sale by Chinese bottled water producer Nongfu Spring’s HK$677.7 billion. The number of mom-and-pop investors in Ant Group will also exceed the record when 970,000 people submitted bids for the shares of the Industrial and Commercial Bank of China (ICBC) in 2006, according to stock exchange data.Jack Ma’s Ant Group has a record high number of investors and subscription money for its IPO closes on Friday noon. Photo: Bloomberg alt=Jack Ma’s Ant Group has a record high number of investors and subscription money for its IPO closes on Friday noon. Photo: Bloomberg”The offering is so hot that more than 1 million retail investors have sent their subscriptions,” said Louis Tse Ming-kwong, managing director of Hong Kong-based brokerage Wealthy Securities. “It is a historic moment for Hong Kong’s securities market.”Retail investors submitted a record 19.05 trillion yuan (US$2.85 trillion) in subscription money for Ant’s share offering on the Star Market, a board of technology stocks in Shanghai. It amounted to 872 times oversubscription, the firm said in a Shanghai exchange filing late on Thursday.Ant Group offered 1.67 billion shares each in Hong Kong and Shanghai to raise about US$34.5 billion, making it the world’s biggest IPO. Including a 15 per cent overallotment in each leg, the total size of the IPO will increase to US$39.67 billion.Strong demand from individual investors in Hong Kong will trigger a mechanism where the retail allocation is raised to a maximum of 10 per cent, from the initial 2.5 per cent.Investors are buying the shares as the valuation is deemed cheaper than overseas payment companies, said Hong Kong Securities Association chairman Gordon Tsui. Ant is the operator of Alipay and an affiliate of Alibaba Group Holding which owns this newspaper.”Investors believe in the future economic and technological growth of mainland China,” Tse of Wealthy Securities said. “There is an increasing number of people using digital payment. Ant may have more upside room to go if it expands Alipay to overseas markets.”Ant Group began taking orders from retail investors in Hong Kong from Tuesday. HSBC, Bank of China (Hong Kong), other retail banks and the city’s 600-odd brokerages have made available as much as HK$500 billion of margin financing loans to help investors fund their subscription, more than double the capacity for Nongfu Spring’s IPO.”We have seen record levels of IPO applications and IPO loan uptake for Ant Group,” HSBC said in a statement. The lender set aside HK$150 billion of loans for its customers to subscribe to the shares at an interest rate of 0.48 per cent to 0.88 per cent. How retail investors can increase their chances of getting a piece of Ant Group’s blockbuster IPO in Hong KongThe frozen IPO liquidity, however, has not driven up local interest rates substantially, with the one-month interbank offered rate or Hibor rising to 0.48 per cent on Thursday from 0.13 per cent a week earlier. The current level is still lower than 2 per cent in March.Part of the reason is the presence of hot money in the system. More than HK$383.51 billion has entered the local financial system since April, according to HKMA statistics, forcing it to intervene more than 85 times to keep the Hong Kong dollar from breaking the stronger end of its trading band.The inflows pushed the aggregate balance, or the amount of cash sloshing in the banking system, to a record HK$457.46 billion on Friday, or more than eight times the level before the HKMA’s currency-market intervention.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

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