Chinese Investors Want To Invest In Tech IPOs

14. March 2018.








A new survey by Shenzhen Stock Exchange reveals that most Chinese investors, who expect the government to roll back some of its rules on initial public offerings (IPOs) for tech companies, want to be able to invest in domestic companies’ IPOs.

Reuters, citing the study, reported that the exchange found close to 90 percent of those surveyed said that ChiNext, the startup board in Shenzhen, should increase its support for tech firms and back lowering the financial threshold for a tech company to launch an IPO. They also support dual share classes. As it stands right now, tech companies, including Alibaba, Baidu, and Tencent, are listed offshore. Last week, Reuters, citing people with knowledge of the plan, reported that China might allow tech firms that are listed offshore to sell a type of share in the country.

The support on the part of Chinese investors to help fund tech companies comes as some of China’s leading technology players are seeing brisk business. Take Ant Financial, the payment affiliate of Alibaba, as one example. The company has seen its consumer lending business reach 600 billion yuan ($95 billion) even as the company faces a stricter environment for securitizing loans in its home country of China.

According to news from Bloomberg this week, citing people familiar with the matter, Ant Financial’s lending division, which provides loans to consumers through its Huabei and Jiebei units, has doubled since the start of 2017 until March 2018. The uptick in consumer lending comes as the Chinese government is lowering quotas for new asset-backed securities that enable these loans to be issued. The loans can have annual interest rates that are as much as 15 percent, although a person familiar with the matter told Bloomberg the interest rates on the loans are typically less than 15 percent.

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