Title: Why did China stop Ant Group's IPO?
Website: https://www.pascalcoppens.com/

CONTENT
In this video the question is about what happened for CHina's regulators to stop the Ant IPO? Was it due to an internal political tension? Was it geopolitical? The Election in U.S.? Was it regulators who are worried of ponzi-scheme? Was it tightening of financial markets?

TRANSCRIPT
Now two days before Ant Financial was going to go public in Shanghai and Hong Kong,
the Chinese regulators told Ant that they wouldn't be doing an IPO in Shanghai.
They didn't follow or comply with the new regulation that came out just a week earlier
and so sorry but Jack you're not going to be able to go public,
a big deal because this was going to be the biggest IPO in history.
Ant Financial was going to change the whole financial world,
and ultimately it was an IPO of about 35 billion dollars that was going to be raised at a valuation over 300 billion dollars
and it was oversubscribed almost a thousand times.
Everybody wanted to be a part of it but it won't happen and so what is behind all this?
There's a lot of speculation, conspiracy theories and people saying that it's primarily an internal matter.
This is about a fight between the Communist Party of China and the technology companies
like Ant Financial and Alibaba and Jack Ma in person
that are basically not taking care of doing things according to the regulation and there is some truth in that.
Now the second reason that people often give is that it's a geopolitical thing.
With all the tensions between China and the US, the regulators in China, the government, the Party, they want to be very cautious not to rock the boat specifically because now there's a decoupling strategy coming from the US
but when we think about financial markets, that's a big risk for the US.
If companies and investors are now investing their money in Shanghai and Hong Kong instead of in New York, that could shake this whole financial market and capital markets and that's not something that China wants to show
to the world that they're trying to change the whole financial setup that is there today.
The real reason in my view is the third one and this is purely a matter of regulation.
If you've seen what has happened in China in the past many years,
you've seen that this financial stability has been very very shaky.
Specifically, the debts have increased in China a lot over the past 10 years but there has also been a lot of shadow banks
and the biggest fraud problem is the peer-to-peer loans,
I've written a lot about it in my book 'China's New Normal'.
There were about 5000 of these companies giving loans to consumers, to people that needed this, to small businesses
and the loans came from people who made some money before or from institutions
and a lot of them ran away with their money, a lot of them went bankrupt.
Now, we're talking about a handful of P2P companies that are still okay.
So this peer-to-peer loan system has created so much worry with the regulators that this hurts the normal small people,
the investors didn't want Ant to become another Ponzi scheme like many of these were.
I think the P2P peer-to-peer headaches that China had are the main reasons why they stopped this IPO so abruptly
and I believe in 6 to 12 months from now that Ant Financial will go public again.
The valuation might be lower,
if you would just take out those 40% of the microloans or loans that Ant is doing
and the 60% rest that are really complying with all the regulations
you would still have a valuation of 200 billion dollars, it's not so small.
So give it 6 to 12 months, Ant will figure it out,
they will talk with the government and my expectation is that they will go public in 2021 without any doubt
but it will be under different conditions.
So I am very bullish for the future of Ant,
I just think this was the time for the Chinese financial markets to figure out and give them time to figure out the regulation
between the technology companies and the old world,
and to make sure both the investors and the people who receive the money, the people who save the money,
that they're all safe for their future in a new world of fintech.
I do believe that this is critical moment in time and history where you can see that the regulators in China
are trying to catch up with the speed of technology and innovation of the fintech world in that space.
So this could even become a standard worldwide on how the new regulation could cope with the speed of technology.

KEYWORDS
Pascal Coppens, China, innovation, trends, keynote, speaker, public speaker, Ant Financials, Ant Group, FinTech, IPO, regulators

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