Ant beats lion

October 28, 2020 11:02
Photo: Bloomberg

Lion might be the king of animal kingdom but ant, as seen in the capital market, could vanish the lion.

Welcome to Ant Group, soon the world’s biggest fintech company. It is now offering shares in Hong Kong and Shanghai and its IPO is set to raise more than US$34 billion.

No one is more excited than founder Jack Ma, who stands to crack into the world’s top 10 billionaire list next month after the hotly sought IPO is listed.

At an offer price of HK$80, Ant will be valued at HK$2.4 trillion, or about 40 per cent of the market cap of Tencent Holdings known as “penguin” for its signature WeChat service.

Ant is also more than three times the market value of HSBC, known as the “lion” or “elephant” because of its dominance in the financial markets in Hong Kong in the past decades. Unfortunately, times have changed. HSBC’s market value has halved year-to-date amid the pandemic.

If HSBC has the most retail investors in Hong Kong, Ant stands to take it further.

To describe Ant investors as ants is not an exaggeration. In the first day of its IPO offering, over HK$190 billion of funds rushed to get a piece of Ant, according to local brokers’ record.

It is not far-fetched to expect there will be more than one million Hong Kong investors to become an Ant investor, given the company might not want to disappoint investors and would probably give out a minimum one lot valued at HK$4,000 to each subscriber.

In its A share offering in Shanghai, Ant picked “688688” as its lucky stock code with an offer price of 68.8 yuan.

In Hong Kong, the stock code is 6688, similar to its shareholder and sister company Alibaba Group (9988) , which also made history with its secondary listing in Hong Kong last November.

“6” and “8” are considered lucky numbers in Chinese. The word for “eight” in particular sounds similar to “prosperity”.

Ant is a tiny insect, but it might produce a big and quick return in a market looking for excitement.

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EJ Insight writer