The Ant Group logo is displayed at the company’s headquarters, a branch of Alibaba, in Hangzhou, Zhejiang Province, China, on October 29, 2020.
Aly Song | Reuters
GUANGZHOU, China – Alibaba shares in Hong Kong jumped nearly 4% in the open on Tuesday after regulators ordered financial technology-related group E-commerce giant to rebuild its business.
That, along with a fine of 1
“Following the decision and sanctions imposed by SAMB’s BABA antitrust investigation, we believe the street has more color regarding the latest Ant Group updates,” Jefferies said in a note released Monday.
Alibaba’s Hong Kong-listed shares later cut their initial gains, but were last seen trading nearly 2% during Tuesday’s session. Shares of Alibaba, registered in the US, closed more than 9% higher on Monday.
Alibaba owns approximately 33% of Ant Group, the company that operates the popular Alipay mobile payment app in China. In November, regulators forced Ant Group to suspend an initial public offering (IPO) worth $ 34.5 billion in Hong Kong and Shanghai.
At the time, changes in the financial technology regulatory environment were blamed for stopping the list.
This came days after Jack Ma, the founder of Ant Group and Alibaba, made some comments that seemed critical of China’s financial regulator.
In December, the People’s Bank of China (PBOC) ordered Ant Group to adjust its business. And on Monday, China’s central bank outlined specific details about what the company needs to do.
PBOC asked Ant Group to restructure into a financial holding company. Ant Group also needs to create a greater divide between its Alipay payment app and its credit products. Yu’e Bao, Ant Group’s money market fund, once the world’s largest, should also be reduced, PBOC said.
Both Alibaba’s large antitrust fine and Ant Group’s restructuring plan are part of broader pressure from China to tighten control over the country’s tech companies, which have become largely unburdened giants. Their activities often cover sectors from games to financial technology, as well as cloud computing.
While Beijing’s eyes have so far been on Jack Ma’s empire, there are signs that the crackdown could spread to more companies and other areas such as data protection.