On Friday, Chinese regulators fined Ant Group about $1 billion, raising shares of Alibaba, which owns a third of the financial technology company. The punishment brings short-term pain, but it hints at a brighter future for the entire Chinese tech sector.
Alibaba’s (Ticker: BABA) stock in Hong Kong rose 6.4% on Friday after Reuters reported that punishment is imminent. US-listed stocks recently rose 5.8% in New York trading after China’s central bank and the country’s securities regulator confirmed 7.123 billion yuan…
Chinese regulators on Friday fined Ant Group nearly $1 billion, sending shares of Alibaba soaring
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Which owns a third of the fintech company. The punishment brings short-term pain, but it hints at a brighter future for the entire Chinese tech sector.
Alibaba’s (Ticker: BABA) stock in Hong Kong rose 6.4% on Friday after Reuters reported that punishment is imminent. US-listed stocks recently rose 5.8% in New York trading after China’s central bank and the country’s securities regulator confirmed the 7.123 billion yuan ($990 billion) fine to Ant Group, among the largest ever for a Chinese tech company.
Part of the fine, the organizers said, included the forfeiture of illegal income, based on Statement posted in Chinese It is translated with software by Barron. The statement said authorities alleged, among other things, that Ant broke the rules when conducting banking, insurance, payment and settlement business in the past, and had problems with corporate governance and anti-money laundering obligations.
While such a fine bites down on Ant Group, it actually bodes well for the company, as well as Alibaba and tech peers like JD.com (JD), as it suggests that nearly three years of regulatory pressure on the sector is heading toward closure.
Chinese authorities began a brutal crackdown on the country’s fast-growing tech sector in late 2020 by botching Ant’s highly anticipated initial public offering — a move that sent the stock market crashing, wiping billions of dollars out of Chinese tech stocks.
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Ant’s sanction by regulators should pave the way for the group moving forward — and perhaps even going public.
It’s another symbolic development from Beijing that the tech sector is free to continue its hot streak of growth — albeit now in a macro environment in which the world’s second-largest economy is facing a slowdown. That should take some of the burden off shares in Alibaba, which lost nearly half of their value in 2021 alone, and in 2023 traded for less than a third of their peak in 2020.
Write to Jack Denton at [email protected]
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