China suspended Ant Group’s $37bn stock market listing on Tuesday, thwarting the world’s largest IPO with just days to go, in a dramatic move that left investors and bankers scrambling for answers.
The Shanghai stock exchange first announced that it had suspended Ant’s initial public offering on its STAR market, prompting Ant to also freeze the Hong Kong leg of the dual listing, which was due on Thursday.
Ant said that its listing had been suspended by the Shanghai stock exchange following a meeting that its billionaire founder Jack Ma and top executives held with Chinese financial regulators.
The Chinese financial technology giant said it may not meet listing qualifications or disclosure requirements, and also cited recent changes in the fintech regulatory environment.
The Shanghai stock exchange described Ant’s meeting with financial regulators as a “major event”.
Regulators had summoned Ma, Ant’s Executive Chairman Eric Jing and Chief Executive Simon Hu to a meeting on Monday when they were told the company’s lucrative online lending business would face tighter government scrutiny, sources told Reuters news agency.
Beijing has become more uncomfortable with banks heavily using microlenders or third-party technology platforms like Ant for underwriting consumer loans, amid fears of rising defaults and deteriorating asset quality in a pandemic-hit economy.
“The Communist Party has shown the tycoons who’s boss. Jack Ma might be the richest man in the world but that doesn’t mean a thing. This has gone from the deal of the century to the shock of the century,” said Francis Lun, CEO of GEO Securities.
The move reverberated across markets, with Alibaba Group Holding, which owns about a third of Ant, falling 9 percent in United States trading, losing nearly $76bn – more than double the amount Ant was going to raise in its listing.
“This is a curveball that has been thrown at us … I don’t know what to say,” said a banker working on the IPO.
Ant was set to go public in Hong Kong and Shanghai on Thursday after raising about $37bn, including the greenshoe option of the domestic leg, in a record public sale of shares.
The IPO was a sensational draw for China’s retail investors who bid a record $3 trillion, equivalent to the entire annual economic output, for shares in the fintech giant.
Ant added that it would release further details on the suspension of its H-share listing and on application refunds as soon as possible.
Apology for inconvenience
The Chinese state-backed Economic Daily newspaper said in a commentary published after news of Ant’s IPO suspension that the listing’s delay showed regulators’ determination to protect the interests of investors and the most pressing matter was for Ant to carry out “rectifications”.
Ant’s meeting with regulators on Monday came as Chinese authorities published new draft rules for online micro-lending.
“Ant may be just falling victim to their own size and success,” said Alex Sirakov, senior associate at advisory firm Kapronasia. “I am more inclined to think of this as a political message reminding everyone this is a highly regulated economy.”
At the end of October, Ma had called financial regulation outdated and badly suited to companies trying to use technology to drive financial innovation.
Ant apologised to its investors on Tuesday in a separate statement for “any inconvenience caused by this development”, adding: “We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges.”
Alibaba said that it would support Ant to adapt and embrace the evolving regulatory framework.
CICC and China Securities Co, co-sponsors for Ant’s STAR IPO did not immediately respond to requests for comment.
JPMorgan and Citigroup declined to comment, while Morgan Stanley did not immediately respond to a request for comment. The three Western banks plus CICC are co-sponsors of Ant’s Hong Kong IPO.
Statistics Canada says economy grew at a record pace in Q3 – CityNews Toronto
Statistics Canada says the economy grew at a record annualized pace of 40.5 per cent in the third quarter as businesses came out of COVID-19 lockdowns.
Financial data firm Refinitiv says the average economist estimate was for an annualized growth rate of 47.6 per cent for the quarter.
The rebound over July, August and September was a sharp turnaround from the preceding three-month stretch saw a record drop.
Driving the bounce-back were the further rolling back of public health restrictions that allowed businesses to reopen.
Statistics Canada also says there was a substantial increase in the housing market owing to low interest rates and household spending on goods like cars.
Despite the overall increase, the national statistics office says real gross domestic product still remains shy of where it was before the pandemic.
More to come
China’s factories crank up output, but jobs, debt remain concerns – Aljazeera.com
China’s factory activity expanded at the fastest pace in more than three years in November, while growth in the services sector also hit a multi-year high, as the country’s economic recovery from the coronavirus pandemic stepped up.
Upbeat data released on Monday suggest the world’s second-largest economy is on track to become the first to completely shake off the drag from widespread industry shutdowns, with recent production data showing manufacturing now at pre-pandemic levels.
But companies are still not expanding their payrolls, the figures show, and some analysts point to rising debt levels among state-owned firms as another possible headwind for the economy.
China’s official manufacturing Purchasing Manager’s Index (PMI) rose to 52.1 in November from 51.4 in October, data from the National Bureau of Statistics showed. It was the highest PMI reading since September 2017 and remained above the 50-point mark that separates growth from contraction on a monthly basis. It was also higher than the 51.5 median forecast in a Reuters poll of analysts.
“The latest official PMI surveys show that the pace of economic growth picked up in November on the back of a broad-based improvement in both services and manufacturing,” Julian Evans-Pritchard, senior China economist at research firm Capital Economics, said in a note sent to Al Jazeera.
China’s blue-chip share index hit a 5-and-a-half-year high following the data release.
The robust headline PMI points to solid fourth-quarter growth, which analysts at Nomura expect to quicken to 5.7 percent compared with the same period last year, from 4.9 percent in the third quarter, an impressive turnaround from the deep contraction earlier this year.
The economy is expected to expand by about 2 percent for the full year, the weakest in more than 30 years but still much stronger than other major economies that are struggling to bring their coronavirus outbreaks under control.
The official PMI, which largely focuses on big and state-owned firms, showed the sub-index for new export orders stood at 51.5 in November, improving from 51.0 a month earlier. That bodes well for the export sector, which has benefitted from strong foreign demand for medical supplies and electronics products.
Also helping activity in November were aggressive e-commerce shopping promotions, which unleashed solid consumer demand and bolstered confidence for small and medium firms.
But a surging yuan and further lockdowns in many of its key trading partners could pressure Chinese exports, which have been surprisingly resilient so far.
More companies have reported the impact from currency fluctuations, compared with a month ago, said Zhao Qinghe, senior statistician at the NBS.
“Some firms have flagged that as the yuan continues to rise, corporate profits are under pressure and export orders are declining,” said Zhao.
He added that the recovery across the manufacturing industry remained uneven. For example, the PMI for the textile industry has stayed below the 50-point threshold, pointing to weak business activity.
In the services sector, activity expanded for the ninth straight month. The official non-manufacturing Purchasing Managers’ Index rose to 56.4, the fastest since June 2012 and up from 56.2 in October, as consumer confidence gathered pace amid few COVID-19 infections.
Railway and air transportation, telecommunication and satellite transmission services and the financial industry were among the best-performing sectors in November.
A sub-index for construction activity stood at 60.5 in November, improving from 59.8 in October, as China steps up infrastructure spending to revive its economy.
Monday’s data also showed that the labour market is still facing strains. Services firms reduced payrolls at a faster clip in November, while factories slashed staff for the seventh straight month, although at a slower pace.
“The continued recovery reduces the need for further monetary easing, but any shift to tightening is also unlikely given continued labour market pressure,” said Erin Xin, Greater China economist at HSBC.
Another factor that could prove problematic for China is rising levels of debt among regional governments and state-owned enterprises (SOEs).
“The recent wave of SOE debt defaults has contradicted the overall data improvement, including the latest PMI,” wrote Daiwa Capital Markets economists Kevin Lai and Eileen Lin in a research note sent to Al Jazeera.
“Many of these companies should have benefited from a nascent recovery since the economy reopened. However, most of these companies are owned and controlled by local governments,” they said.
“They have been allowed to raise more funds from the bond market and run bigger fiscal deficits when the pandemic began to hit the local economy. Hence, when domestic demand indicators turn better, it is usually a result of more debt-driven stimulus being injected into various industrial sectors.”
Scotiabank CEO 'cautiously optimistic' about COVID rebound, reports $1.9B Q4 profit – Yahoo Canada Finance
Apple Rush Company seeing continued success with Element C through its distributor Botanaway, Inc. in Virginia
TITUSVILLE, Fla., Dec. 01, 2020 (GLOBE NEWSWIRE) — The Apple Rush Company, Inc. (US OTC PINK: APRU), announces that it has shipped additional pallets of Element C to Botanaway, Inc. in Virginia. Element C continues to prove itself in the territories it is represented in. Sales have been solid and we believe it is the best in class of CBD beverages. It is one of a kind in taste, efficacy, and value. Depending on the market, pricing at retail is falling between $5.99 and $7.99 per can with 25mg of CBD. We have a new production run scheduled for next week and are excited about the reorder rate from retailers in the Midwest as well. Tony Torgerud, CEO of Apple Rush, said, “each of our distributors is proving that Element C is a top notch product that consumers love. We are receiving testimonials from consumers that can’t believe the difference Element C has made in their lives and expect that will continue as we expand to additional territories.”David Reynolds Derian, CEO of Botanaway, Inc., commented, “Element C is an amazing CBD beverage. We are seeing success with it throughout our thousands of retail stores and have our sights on several other functional beverages in the near future. The technology in formulation that APRU utilizes has proven to be a great differentiator from the other CBD infused beverages on the market.”Tony Continued, “we are excited to have David and his team on board for Element C. His support has been invaluable in what we do in research and development for new products. Our production runs will continue to increase in size as we expand across the country. I would expect to be making some announcements in the near future on new product development expanding the Element Brands line. We have been receiving calls from other parts of the country for distribution and will be adding those as production increases.” About The Apple Rush Company, Inc. The Apple Rush Company, Inc., through its subsidiary APRU, LLC, is a distributor of CPG products under the trademarked Apple Rush brand, Element brand and other labels. The Apple Rush brand has more than 47 years of existence in the natural beverage industry. As a historical leader in the organic and natural beverage sector our goal is to now become a leader in the distribution of anhydrous hemp oil products nationwide. For more information, please go to www.applerush.com, www.aprubrands.com, and www.mistyk.com with our expanded product portfolio.Safe Harbor Act: Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations including words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and similar expressions are forward-looking statements and involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. We are under no obligation to (and expressly disclaim any such obligation to) update or alter forward-looking statements, whether as a result of new information, future events or otherwise. Investor Relations Contact: Tony Torgerud 888-741-3777 x 2
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