An Ant Group logo appears at the company’s headquarters, Alibaba’s subsidiary, in Hangzhou, Zhejiang Province, China, on October 29, 2020.
Aly Song | Reuters
GUANGZHOU, China – Alibaba’s shares in Hong Kong jumped nearly 4% at Tuesday’s inauguration after regulators ordered e-commerce subsidiary of e-commerce giant Ant Group to renew its business.
This, along with a fine of 18.23 million yuan ($ 2.78 billion) received by Alibaba as a result of an antitrust investigation by regulators, removed a source of uncertainty for investors.
“Following the decision and sanctions imposed by BABA’s SAMR (State Administration for Market Regulation) antitrust investigation, we believe the street has more color over Ant Group’s latest updates,” Jefferies said in a note published Monday.
Alibaba shares traded in Hong Kong subsequently reduced their initial gains, but were last seen trading near 2% during Tuesday’s session. Shares in the United States of Alibaba closed more than 9% higher on Monday.
Alibaba, has a stake of approximately 33% in Ant Group, the company that manages the popular mobile payment application Alipay in China. In November, regulators forced Ant Group to suspend what would have been an initial public offering (IPO) of $ 34.5 billion in Hong Kong and Shanghai.
At that time, changes in the regulatory environment of financial technology were blamed for the suspension of the quote.
This came just days after Jack Ma, the founder of Ant Group and Alibaba, made some comments that seemed critical of China’s financial regulator.
In December, the People’s Bank of China (PBOC) ordered Ant Group to rectify its business. And on Monday, the Chinese central bank laid out specific details on what the company should do.
The PBOC asked Ant Group to restructure into a financial holding company. Ant Group also needs to create more separation between its Alipay payment app and its credit products. Yu’e Bao, the money market fund of Ant Group, which was previously the largest in the world, must also be reduced in size, the PBOC said.
Both Alibaba’s massive antitrust fine and Ant Group’s restructuring plan are part of a broader push by China to gain tighter control of the country’s technology companies, which became largely free giants. . Its activities typically cover a variety of sectors, from gaming to financial technology and cloud computing.
While so far Beijing’s eyes have focused on Jack Ma’s empire, there are indications that the crackdown could spread to more companies and other areas such as data protection.