Alibaba Shares Spike On Another Ant IPO Rumor

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by Tyler Durden
Friday, Jun 17, 2022 - 11:53 AM

Just over a week after Alibaba shares pumped (on Ant IPO rumors) and dumped (on Beijing denials), the Chinese megamart's ADRs are soaring once again this morning on on a report that China’s central bank has accepted Ant Group’s application to set up a financial holding company, enabling it to move forward with a potential IPO.

This time its Reuters, not Bloomberg, reporting the rumored move by The PBOC.

Citing three people familiar with the matter, Reuters reports that The People’s Bank of China has accepted Ant Group’s application to set up a financial holding company, noting that it is mostly done vetting license for the credit-scoring JV.

Alibaba, which owns about a third of Ant, is up over 10% in the pre-market...

And while we wait for a denial, here's what some analysts were thinking last week on the rumored shift by PBOC (courtesy of Bloomberg): 

Global CIO Office (Gary Dugan)

  • "We were only saying a few days ago that if Ant was rehabilitated it would mark a major positive. This, in a sense, was where the trouble started"

  • "This would be sufficient" to mark the bottom 

  • "If true, it would be very good news and a major potential turning point for the China tech sector and broader Chinese markets" 

  • It would suggest a major shift of government policy that is pro markets

Kamet Capital Partners (Kerry Goh) 

  • "We now firmly believe that the worst is past us for China tech in particular from a regulatory point of view, but the impact from the economic slowdown, we don't know yet" 

  • The high frequency of positive news this week seems very coordinated and gives the clear signal that the regulatory stresses of the sector are over 

  • The next thing China stock traders would like to see is the property-sector overhang removed for the economy

UOB Kay Hian (Steven Leung) 

  • The report could be "big good news" to market 

  • It "may be considered as the official end of regulatory risk" as the crackdown started with the freezing of Ant's IPO

Bloomberg Intelligence (Marvin Chen) 

  • It is a sign that regulators are following through on their pledge to end the crackdown on tech platforms, which will continue to improve sentiment on the sector

  • "Potential revival of the Ant IPO may also help support financial markets in the region as fund-raising activity has dried up this year"

The news comes one month after JPMorgan reversed its "uninvestable" call of Chinese tech stocks, saying it was an editorial error that allowed the word to slip.