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US-listed China stocks tank after Ant IPO revival reports denied

Written by Nikkei Asia Published on   2 mins read

Alibaba, JD.com, and Pinduodo suffer big declines.

US-listed Chinese stocks tumbled Thursday after regulators in Beijing and Ant Group denied reports that Jack Ma’s fintech company was dusting off shelved plans for an initial public offering.

The Nasdaq Golden Dragon China Index, which tracks major Chinese companies traded on US exchanges, finished the day down 6.8%—worse than the Nasdaq’s 2.75% decline.

E-commerce platforms led the sell-off with Ant investor Alibaba Group Holding down more than 8%, JD.com falling 7.6%, and Pinduoduo sinking 9.6%.

The three largest Chinese equity exchange-traded funds were all down, led by the internet-focused KWEB finishing the day down 6.7%. The broader MCHI and the large-cap FXI both closed with declines of just under 4%.

US stocks sold off broadly Thursday, with investors turning risk averse after the European Central Bank announced an interest rate hike and ahead of US inflation data to be released on Friday.

But the declines in Chinese shares outpaced the rest of the market as the quick denial that an Ant IPO was being considered by the country’s regulators threw cold water on optimism around Beijing tech regulation.

“The combination of these factors are kind of impacting the whole market, but also a little bit more so the Chinese technology companies,” said Anthony Sassine, senior investment strategist with KraneShares, the investment manager for KWEB.

Bloomberg had reported that Chinese regulators had started early stage discussions on a potential revival of Ant Group’s IPO, citing people familiar with the matter, giving a boost to Alibaba shares during premarket trading.

“The China Securities Regulatory Commission has established a team to reassess the fintech giant’s share sale plans,” the report said.

But both the regulators and Ant Group later disputed the report.

“The China Securities Regulatory Commission has not conducted any evaluation or research work in this regard, but we support eligible platform companies to list at home and abroad,” the commission said on its website.

In a statement, Ant Group said: “Under the guidance of regulators, we are focused on steadily moving forward with our rectification work and do not have any plan to initiate an IPO.”

Ant Group planned to list its shares in November 2020 but canceled it after Chinese authorities took a tougher stance on tech companies, including those expanding in the financial sector. The aborted IPO became a symbolic event in a series of clampdowns by Chinese authorities, which spanned video games and other industries.

But as the Chinese economy has shown signs of slowing under the weight of COVID-19 lockdowns, Beijing has appeared to seek to ease the concerns of the tech sector.

Meanwhile, Ant Group recently appointed Laura Cha, chair of Hong Kong Exchanges and Clearing, as an independent director. The move ignited speculation that the company was moving forward on its IPO.

Yet it remains unclear whether Chinese regulators have had a change of heart on tech. Another company hounded by Beijing, Didi Global, is set to delist from the New York Stock Exchange, but the ride-hailing company still has no certainty that authorities will allow it to sign up clients and bring its apps back to popular app stores.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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