An Ant Group logo is displayed at the company’s headquarters, a subsidiary of Alibaba, in Hangzhou, Zhejiang Province, China, October 29, 2020.
Aly Song | Reuters
GUANGZHOU, China – Alibaba shares in Hong Kong jumped nearly 4% on Tuesday after regulators ordered the e-commerce giant’s financial technology subsidiary Ant Group to revamp its business.
This, coupled with a fine of 18.23 billion yuan ($ 2.78 billion) received by Alibaba as a result of an anti-monopoly investigation by regulators, has removed a source of uncertainty for investors.
“After the decision and fines imposed by the SAMR (State Administration for Market Regulation)’s monopolistic investigation into BABA, we think the street has more color on the latest updates on Ant Group,” Jefferies said in a note released Monday. has been published.
The shares in Alibaba listed in Hong Kong later increased their initial profit, but were last traded during the Tuesday session by almost 2%. Alibaba’s US listed shares closed more than 9% higher on Monday.
Alibaba owns an approximately 33% stake in Ant Group, the company that runs the very popular mobile payment app Alipay in China. In November, regulators forced Ant Group to suspend the suspension of an initial $ 34.5 billion public offering in Hong Kong and Shanghai.
At the time, the changes in the financial technology environment were blamed for the suspension of the listing.
It came days after Jack Ma, the founder of Ant Group and Alibaba, made some comments that seemed critical about 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 set out concrete details on what the company should do.
The PBOC asked Ant Group to restructure into a financial holding company. Ant Group must also create more separation between its payment program Alipay and its credit products. Yu’e Bao, Ant Group’s money market fund, which was once the largest in the world, must also be reduced, the PBOC said.
Both Alibaba’s massive fines against the trust and Ant Group’s restructuring plan are part of a broader pressure by China to tighten the country’s technology companies, which have become largely unhindered in giants. Their activities often span sectors, from games to financial technology as well as cloud computing.
While Beijing’s eyes so far have been on Jack Ma’s empire, there are signs that the repression could extend to more companies and other areas such as data protection.