December 8, 2023

‘Worst Over’ Call for China Tech Booms on Ant IPO Revival News

(Bloomberg) — A growing chorus of traders are saying that the bottom for China’s technology…

(Bloomberg) — A growing chorus of traders are saying that the bottom for China’s technology stocks may finally be here, bolstered by a report Thursday that China may allow Ant Group Co. to revive its initial public offering.

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Chinese financial regulators have started early stage discussions on the listing, people familiar with the matter told Bloomberg.

READ: Alibaba Shares Jump as China Considers Reviving Ant Group IPO

Here’s what market participants are saying:

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

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”

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

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