Ant IPO Pushes Hong Kong Dollar Demand

  • Hong Kong dollar continued to perform strongly because investors were so interested in companies lining up to list on the Hong Kong Stock Exchange
  • The listing demand of Ant Group is expected to be so hot that Hong Kong brokerages provide retail investors with 20 times leverage to buy the stock
  • Nick Xiao, chief executive of Hywin International, a Hong Kong financial services company, said that the Ant IPO is the best investment opportunity in 10 years

Yesterday, Ant Group’s Hong Kong IPO has been approved by the Hong Kong Stock Exchange, and the public offering has entered a countdown stage. The data shows that due to the enthusiasm of global investors, Ant’s IPO plan in Hong Kong stocks has pushed the demand for Hong Kong dollars to historical highs.

Ant Group, formerly known as Ant Financial and Alipay, is an affiliate company of the Chinese Alibaba Group. Ant Financial is the world’s highest-valued FinTech company.

According to Bloomberg News, since the Fed injected a lot of liquidity into the market after the global financial crisis, demand for the Hong Kong dollar has never been stronger.

Attracted by the highly anticipated stock offerings of large Chinese stocks such as Ant Group, funds flocked to Hong Kong, so that the Hong Kong dollar has remained a strong side in the exchange guarantee range since April.

Data show that this year’s inflow of funds forced the Hong Kong Monetary Authority to sell Hong Kong dollars, and by Wednesday the intervention measures of the Monetary Authority will inject about HK$286 billion ($37 billion) into the market. This record-breaking annual increase even exceeded the sum of 2008 and 2009.

On July 20, Ant Group announced its “A+H” listing plan. On August 25, the IPO documents were submitted at the same time in Shanghai and Hong Kong. On September 18, the Shanghai Stock Exchange issued an announcement to approve the listing application of Ant Group on the Science and Technology Innovation Board.

On the 19th, the media reported that the China Securities Regulatory Commission and the Hong Kong Stock Exchange had agreed to Ant’s IPO plan in Hong Kong.

Bloomberg reported that, as in 2009, the Hong Kong dollar continued to perform strongly because investors were so interested in companies lining up to list on the Hong Kong Stock Exchange. The listing demand of Ant Group is expected to be so hot that Hong Kong brokerages provide retail investors with 20 times leverage to buy the stock, requiring only 5% of the initial capital.

Hywin Financial Holding Group Co

Nick Xiao, chief executive of Hywin International, a Hong Kong financial services company, said that the Ant IPO is the best investment opportunity in 10 years.

Almost every brokerage and bank are trying to find margin financing for their clients so that they can fight for rights issue opportunities.

As it may set the largest IPO scale in history, the progress of Ant’s IPO in Hong Kong stocks is closely watched by investors around the world.

“Nihon Keizai Shimbun” previously reported that Hong Kong bankers and investors hope that the Ant IPO will bring Hong Kong a glorious year, which will play a key role in the direction of the Hong Kong stock market and the development of China’s financing market.

Yang Yuting, a chief economist for the Greater China Region of ANZ Bank, said that the development of the Hong Kong stock market will attract capital inflows, and the listing of more Chinese companies will increase the demand for Hong Kong dollars. “This is just the beginning of the upward cycle. The strength of the Hong Kong dollar is expected to continue for a long time.”

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Joyce Davis

My history goes back to 2002 and I  worked as a reporter, interviewer, news editor, copy editor, managing editor, newsletter founder, almanac profiler, and news radio broadcaster.

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