China’s Retail Investors Order Over $2.8T Of Ant Group Stock

Ant Group indicated on Thursday (Oct. 29) that retail investors in mainland China made over $2.8 trillion of orders for their part of its offering, which is taking place in both Hong Kong and Shanghai at the same time, The Wall Street Journal reported.

Individual investors in Hong Kong have rushed to purchase into the initial public offering (IPO), as they wager that Ant Group will spike in value following its public debut on Thursday (Nov. 5). Those investors’ orders went 389 times above the 2.5 percent of shares set aside for them, WSJ reported, citing an unnamed source. That resulted in their share of the deal being bolstered to 10 percent.

Certain small investors have taken out loans from brokers and financial institutions (FIs) to place larger orders in hopes of increasing the odds of receiving stock.

“I’m all in with Ant,” said a manager at a company in China that placed an order in Hong Kong because he was worried about not getting shares in Shanghai. He indicated that he used all of the money in his stock account in Hong Kong, which is worth approximately $52,000, to get a 95 percent margin loan and make an order of approximately $1 million.

More than five million people made orders in Shanghai for stock – reportedly a new high for IPO subscriptions on STAR Market, which rolled out in 2019.

The news comes after it was reported that Ant Group’s pending public offering could bring about a multibillion-dollar reward for a small collection of foreign investors, who purchased a part of the Chinese FinTech two years prior. Some of the leading investors put half a billion each into Ant Group. Overall, international investors put $10.3 billion into Ant in the summer of 2018 as part of its third round of funding. The choice of investors was reportedly very selective, with Ant said to have turned down offers from those who had invested in competitor Tencent in the past.