Chinese fintech giant goes transparent, aims for e-finance revolution: IPO price sets record at $34 billion

It has always been the absolute opposite way around.

Chinese partners went to great extents to penetrate the  notorious communist firewall that prevents business being conducted on a cross border basis in order to get even a mere glimpse of Western technology with which to power their brokerage, managed portfolio company or wealth management entity.

It was never the case that Western firms, large or small, IB or broker, platform developer or liquidity vendor went to China in order to expand that across the world.

Very simply, Chinese companies, despite some of them being absolutely vast and in many cases larger than their supplier, have been utterly addicted to and dependent on Western technology vendors.

One of the many reasons for this is trust. It has until now been totally impossible for any firm to trust a Chinese entity, and vice versa, largely due to the inability to conduct any form of due diligence, surveillance or reckoning, as all information is blocked.

The difficulties of doing business have worn very thin with most companies too. Those wishing to form relationships with Chinese partners had to establish Chinese-owned and operated subsidiaries inside the People’s Republic, and then take a leap of faith, trusting a local director with shares and intellectual property, in a nation where loyalty lasts as long as the memory span of a goldfish.

Those days are over. Many companies have pulled out of the market, except for those which have sold their stock to Chinese heavyweights with huge government influence, like Saxo Bank, a company which is huge in Chinese markets from hedge funds to retail FX trading.

Nowadays, things are somewhat different. We have all been beaten down by the clear attempt at internalizing every single nation’s economy by forcing Chinese government-led lockdowns onto the world. The Asian superpower is running amok, and in doing so, going not just big, but huge.

Today, ANT, a Chinese financial technology company whose remit is to create the infrastructure and platform to support the digital transformation of the service industry, whilst seeking to enable all consumers and small businesses to have equal access to financial and other services that are inclusive, green and sustainable, has finalized its IPO value, constituting a world record value.

The company, which was little known until very recently, has, in true Chinese style, gone from zero to hero in a very short space of time and is now about to IPO for $34 billion.

Speaking at a conference over the weekend, founder Jack Ma said the pricing for the Shanghai part of the duel-listing has been determined. He did not reveal the amount, although details are expected to arrive on Tuesday.

Yes, that’s right, Jack Ma, founder of internet e-commerce giant Alibaba. If anyone knows how to dominate, it’s Mr Ma.

Meanwhile, the price for the Hong Kong part of the listing is expected to revealed later in the week ahead of the listing early next month. “This was the first time such a big listing, the largest in human history, was priced outside New York City,” Mr Ma said at the Bund Summit. “We wouldn’t have dared to think about it five years, or even three years ago.”

Back in July this year, FinanceFeeds reported the company’s initial wish to go publicly listed, a very rare thing for a Chinese firm, and an important point as this addresses the transparency issue usually associated with doing any form of business with companies behind a communist iron curtain, and demonstrates the firm’s monopolistic aspirations in global markets.

At that time, Eric Jing, Executive Chairman of Ant Group, said “The innovative measures implemented by SSE STAR market and the SEHK have opened the doors for global investors to access leading edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets. We are thrilled to have the opportunity to play a part in this development.”

“Becoming a public company will enhance transparency to our stakeholders, including customers, business partners, employees, shareholders and regulators. Through our commitment to serving the under-served, we make it possible for the whole of society to share our growth,” Mr Jing added.

If it is so difficult for Western fintech firms to gain dominance and become bigger than banks, how is it so easy for this upstart to simply come in and take over?

It is highly likely that in the future, we will all be using ANT for various components of electronic trading, be that reporting, back office, client interaction and connectivity to service providers.

AWS already has done this by sidling up to regulators so that all regulatory reports have to be submitted via Amazon’s AWS cloud solution, thus if a broker takes regulatory reporting services from a specialist regulatory technology firm, reporting to regulators will by default be done via AWS. A clever move, however the battle between Amazon and Alibaba, both odious entities in my opinion, is hot to the point where Mr Ma will want total control.

The question is, do you want your company’s data owned and stored by a firm which is owned largely by the Chinese government, despite its huge IPO figure.

Guess who will be the main shareholder….