SINGAPORE – Orient Capital Research’s managing director Andrew Collier says the increased regulatory scrutiny of Alibaba affiliate Alibaba and the strength of fintech could be bad for the Chinese economy as well as China’s fintech sector.
The up-coming list of Chinese tech giant Ant Group – which was set to be the largest IPO in the world – was the list. Suddenly hung in November.
It came shortly after the ant ruled Jack Ma Chinese authorities have interviewed other company executives about regulatory concerns.
“It is true that when Jack Ma gave his terrible speech … that annoyed a lot of senior politicians, I thought this would be a one-time thing,” Collier said in an interview with CNBC’s Squawk Box Asia on Tuesday.
He was referring to the Chinese billionaire’s speech in late October as he reportedly criticized the organizers during a period Controversial speech. What is the founder of the Chinese e-commerce giant Alibaba, which owns about 33% of the shares of Ant Group.
Days later, Ant’s dual listing in both Shanghai and Hong Kong was suddenly suspended, dropping Alibaba shares.
“It was clear that this was an excuse on the part of the leadership and possibly the state banks to take tough action against the entire fintech sector,” Collier said. “Part of this is a project because of concerns about, you know, the possibility of … a financial crisis. But they’ve really cut the wings of Ant Financial in very serious ways.”
The problems for both Alibaba and you have only grown since, with the Chinese authorities Announce an antitrust investigation At the e-commerce giant last week. Chinese regulators also recently ordered Ant Group to do so Correct its actions.
These developments caused Hong Kong-listed Alibaba shares to suffer another decline – more than HK $ 831 billion (about $ 107 billion) of its market value wiped out in just two sessions, based on CNBC’s accounts.
Collier said the regulatory scrutiny surrounding Ant was likely centered around the desire to protect the Chinese consumer, as well as politics.
“At first I kind of thought that (People’s Bank of China) He was trying to protect the consumer, “the analyst was quoted as saying Previous challenges in the peer-to-peer lending space.
“Now, given that they are becoming very serious and making new claims and asking them to reduce large areas of their business, it is clearly a political goal in part to reduce the size of these companies so that they do not have much market share and threaten the existence of the state system.”
“It’s not good for the future of fintech or the future of the Chinese economy,” Collier said.