The Enlightenment of Ant's Listing to Hong Kong Government

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Written by: Commentary Editing Room

2020-10-28 14:00

Last update date: 2020-10-28 14:00

Ant Group, which focuses on payment platforms, electronic wallets and other businesses, simultaneously issued shares in the Mainland and Hong Kong. The total amount of funds raised exceeded 267 billion yuan, making it the world's largest IPO.

On the first day of Tuesday (27th), over 180 billion subscriptions have been made, which is equivalent to over-buying by more than 54 times. It is estimated that the number of subscribers in Hong Kong will exceed 1 million.

Hong Kong government officials should understand that this kind of event cannot just stop at the level of the financial market.

Ant Group is the leading electronic payment and digital financial platform in the mainland. Not only does its Alipay have more than 1 billion users, it also has a net profit of more than 20 billion in the first half of this year.

In addition, compared with its parent company Alibaba, Ant Group has a lower entry threshold, with a single subscription of only 4,000 yuan. It is not difficult to understand why this IPO will cause a subscription boom in Hong Kong.

Financial Stock Market and Real Economy

Stockholders may be optimistic about the business growth of the company and use this opportunity to make long-term investments, or they may trade in a short period of time, intending to speculate and make profits.

In any case, IPOs are only trading activities in the stock market, and they have not been able to make a breakthrough, thus benefiting the real economy and society.

But this is not necessarily the case.

First of all, market transactions are inherently subject to stamp duty.

The booming Hong Kong stock market means that the government's tax revenue will increase, and the public money available will increase as a result.

Therefore, if the authorities can properly allocate resources, they can actually increase investment in society due to the booming financial transactions, which will benefit the whole people.

Moreover, Hong Kong is not only a financial trading center, it is also an international city, which is very suitable for companies to set up regional headquarters.

If officials can grasp Hong Kong’s advantages in fund-raising and encourage international companies to set up offices or even headquarters in Hong Kong, they will naturally create more job opportunities and directly benefit the real economy.

Hong Kong in a double loop

It is true that Hong Kong, which developed by relying on the advantages of one country, two systems in the past, is not easy to deal with under the current situation of China and the United States, and may even be unpleasant on both sides.

Economic sanctions or strikes from any aspect may also hurt Hong Kong itself.

But looking at it from another angle, if we can manage the risks, Hong Kong is in a unique position that has the potential to go from side to side.

This time, Ant Group chose to list in the Mainland and Hong Kong instead of in New York, USA. This has already demonstrated Hong Kong's advantages.

Jack Ma, who is also the founder of Alibaba and the controlling shareholder of Ant Group, recently bluntly stated that this large-scale fundraising outside of New York, "We couldn't even think about it five years ago, or even three years ago, but that's how a miracle happened." .

It can be expected that in the future, whether China and the United States continue to wrestle their economies or renew more cooperation, Hong Kong, which is at the connection point between China's domestic and international cycles, is also full of opportunities, including market prospects that more Chinese concept stocks will return to Hong Kong for listing.

Of course, in the end, whether these financial transactions are merely investments or speculative games by a few stockholders, or whether they will become the driving force for Hong Kong's economic and social development also depends very much on the wisdom of officials.

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