Chen Wu frantically clicked the order button on his online brokerage account as the clock struck noon.
Like thousands of individual investors in Hong Kong and across China, the 35-year-old software developer was desperate for a piece of Ant Group's initial public offering. His brokerage was allowing a small number of clients to supercharge their bets on Ant using 33 times leverage, and the offer was only available on a first-come, first-served basis. Mr Wu had to act fast.
“When it was released at noon, I refreshed my page again and again, clicked and clicked,” he said on Tuesday after securing a HK$5.7 million ($735,322) block of Ant shares, equivalent to more than 80 per cent of his existing equity portfolio. “I got it around 12:01pm and the quota ran out within minutes. I was lucky.”
Ant may not be a household name in most of the world, but the Chinese fintech behemoth controlled by Jack Ma has set off an investor frenzy for the history books. Brokers in Hong Kong say the IPO is generating unprecedented client interest, with one firm’s order system briefly shutting down on Tuesday after becoming overwhelmed by subscription requests. Bids for the retail portion of Ant’s concurrent listing in Shanghai totaled a record 19.05 trillion yuan ($2.8tn) on Thursday, exceeding supply by more than 870 times.
The stampede is fuelling to predictions of a first-day pop when Ant is due to start trading on November 5, even though sceptics warn of risks including the US election, tightening regulations in China and rising Covid-19 infections worldwide.
Whether Ant surges or not, its record-breaking $35 billion IPO represents a major vote of confidence in a company that could end up shaping the future of global finance. It also underscores the ability of Chinese companies to marshal huge amounts of capital without tapping American markets, a win for Beijing as it tries to reduce its vulnerability to the threat of US financial sanctions.
Ant is no doubt benefiting from the unusually buoyant mood among retail investors globally, but it’s not just small investors driving demand. Big-name money managers including Singaporean sovereign fund Temasek Holdings, T Rowe Price Group and UBS Asset Management are also angling for allocations. Institutions and strategic investors may take up about 96 per cent of the offering in Shanghai and 97.5 per cent in Hong Kong, according to Ant’s prospectus, although the figures may change due to clawback and greenshoe provisions.
Retail investors are still likely to have a significant impact once trading begins – particularly in Shanghai where individuals drive the vast majority of daily turnover. About 5.16 million retail accounts subscribed for Ant shares on the city’s Star market, where traders are required to have a minimum 500,000 yuan in their accounts.
Meanwhile in Hong Kong, investors are taking advantage of historically low interest rates to amplify their bets with borrowed money. Futu Securities, the brokerage that suffered a brief outage due to a flood of orders on Tuesday, said its margin quota for Ant was used up in about 20 minutes. Banks and brokerages in the city have so far provided about HK$420 billion of margin loans to retail punters, the Hong Kong Economic Journal reported on Thursday.
“There has been unprecedented investor interest,” said Jasper Chan, assistant manager of corporate finance at Phillip Securities, which allocated all of the HK$20 billion it set aside for Ant margin loans on the first day they became available. Mr Chan said demand for the IPO has been more broad-based than usual because of the small minimum lot size of 50 shares, which equates to about HK$4,040.
Yuki Chung, a 30 year-old university teaching assistant in Hong Kong, said she’s planning to bid for HK$500,000 of Ant shares, 90 per cent of which will be funded with borrowed money. “Margin rates offered by banks can be less than 1 per cent, which is definitely very attractive,” she said. “Everyone is taking part in the IPO, so I feel like I should too. I don’t want to lose out.”
Others are wary of placing too much faith in a rally. Elle Lam, a 28 year-old media professional who has invested in several Hong Kong IPOs this year, plans to order just one 50-share lot of Ant, using the rest of her available cash to bid on the Hong Kong government’s upcoming issuance of inflation-linked bonds.
“People are certainly too hyped up,” Ms Lam said. “I think Ant’s valuation is too expensive, so the gain on the debut day could be limited.”
The IPO price translates into a multiple of about 36 times estimated 2021 earnings, surpassing average valuations for both global payments companies and large Hong Kong-listed tech stocks, according to Bloomberg Intelligence.
Still, rich valuations haven’t been a deterrent for Hong Kong IPOs of late. Bottled water giant Nongfu Spring, which debuted in the city last month after receiving orders for 1,148 times the amount of shares it initially set aside for retail investors, is now valued at about 55 times estimated earnings after soaring 65 per cent from its offering price.
“I think Ant can rise 30-40 per cent in the first day,” said Mr Wu, the software developer who took on debt to buy shares. “I’m not too worried about the performance.”
COMPANY PROFILE
Name: Rain Management
Year started: 2017
Based: Bahrain
Employees: 100-120
Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund
Earth under attack: Cosmic impacts throughout history
- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon
- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.
- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater
- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.
- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.
- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.
-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Dubai World Cup prize money
Group 1 (Purebred Arabian) 2000m Dubai Kahayla Classic - $750,000
Group 2 1,600m(Dirt) Godolphin Mile - $750,000
Group 2 3,200m (Turf) Dubai Gold Cup – $750,000
Group 1 1,200m (Turf) Al Quoz Sprint – $1,000,000
Group 2 1,900m(Dirt) UAE Derby – $750,000
Group 1 1,200m (Dirt) Dubai Golden Shaheen – $1,500,000
Group 1 1,800m (Turf) Dubai Turf – $4,000,000
Group 1 2,410m (Turf) Dubai Sheema Classic – $5,000,000
Group 1 2,000m (Dirt) Dubai World Cup– $12,000,000
More from Neighbourhood Watch
THE BIO
Favourite author - Paulo Coelho
Favourite holiday destination - Cuba
New York Times or Jordan Times? NYT is a school and JT was my practice field
Role model - My Grandfather
Dream interviewee - Che Guevara
Results
3pm: Handicap (PA) Dh40,000 (Dirt) 1,000m; Winner: Dhafra, Antonio Fresu (jockey), Eric Lemartinel (trainer)
3.30pm: Maiden (PA) Dh40,000 (D) 2,000m; Winner: Al Ajayib, Antonio Fresu, Eric Lemartinel
4pm: Handicap (PA) Dh40,000 (D) 1,700m; Winner: Ashtr, Abdul Aziz Al Balushi, Majed Al Jahouri
4.30pm: Handicap (TB) Dh40,000 (D) 1,700m; Winner: Falcon Claws, Szczepan Mazur, Doug Watson
5pm: Sheikh Dr Sultan bin Khalifa Al Nahyan Cup – Prestige Handicap (PA) Dh100,000 (D) 1,700m; Winner: Al Mufham SB, Al Moatasem Al Balushi, Badar Al Hajri
5.30pm: Sharjah Marathon – Handicap (PA) Dh70,000 (D) 2,700m; Winner: Asraa Min Al Talqa, Al Moatasem Al Balushi, Helal Al Alawi
UAE currency: the story behind the money in your pockets
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Results
7pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (Dirt) 1,600m; Winner: RB Kings Bay, Abdul Aziz Al Balushi (jockey), Helal Al Alawi (trainer)
7.30pm: Maiden (PA) Dh 70,000 (D) 1,600m; Winner: AF Ensito, Fernando Jara, Mohamed Daggash
8pm: Maiden (PA) Dh70,000 (D) 1,400m; Winner: AF Sourouh, Tadhg O’Shea, Ernst Oertel
8.30pm: Maiden (PA) Dh70,000 (D) 1,800m; Winner: Baaher, Fabrice Veron, Eric Lemartinel
9pm: Maiden (PA) Dh70,000 (D) 2,000m; Winner: Mootahady, Antonio Fresu, Eric Lemartinel
9.30pm: Handicap (TB) Dh70,000 (D) 2,000m; Winner: Dubai Canal, Tadhg O’Shea, Satish Seemar
10pm: Al Ain Cup – Prestige (PA) Dh100,000 (D) 2,000m; Winner: Harrab, Bernardo Pinheiro, Majed Al Jahouri
The biog
Name: Mohammed Imtiaz
From: Gujranwala, Pakistan
Arrived in the UAE: 1976
Favourite clothes to make: Suit
Cost of a hand-made suit: From Dh550
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
MATCH INFO
Fixture: Thailand v UAE, Tuesday, 4pm (UAE)
TV: Abu Dhabi Sports
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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