![]() ![]() On 12 April 2021, The Wall Street Journal reported that under the pressure from the Chinese government, Ant Group would be transformed into a financial holding company overseen by the People's Bank of China. It was reported that the Chinese Communist Party leader Xi Jinping personally scuttled the Ant IPO. ![]() On the eve of the IPO, China stopped the process from moving forward. In October 2020, Ant Group was set to raise US$34.5 billion in the world's largest IPO at the time, valuing the company at US$313 billion. In March 2019, The Wall Street Journal reported that Ant's flagship Tianhong Yu'e Bao money-market fund was the largest in the world, with over 588 million users, or more than a third of China's population, contributing cash to it. ![]() It is the second largest financial services corporation in the world, behind Visa. The group owns the world's largest mobile (digital) payment platform Alipay, which serves over 1.3 billion users and 80 million merchants, with total payment volume (TPV) reaching CN¥118 trillion in June 2020. The China Securities Regulatory Commission and Shanghai Stock Exchange did not respond to requests for comment.Ant Group ( Chinese: 蚂蚁集团 pinyin: Mǎyǐ jítuán), formerly known as Ant Financial, is an affiliate company of the Chinese conglomerate Alibaba Group. Funds targeting the US and India were also popular, Ding said. “Rocketing demand on one hand and quota restrictions on the other, the two factors both contributed to the particularly hot situation in QDII funds we are seeing right now,” said Ding Wenjie, global capital investment strategist at China Asset Management.ĭing said the appetite for funds linked to Japan’s Nikkei index had become “irrational” this month, with one trading at up to a 20 per cent premium to its asset value. Beijing had a total quota of $166bn across 186 institutions for QDII investments as of the end of 2023, up only slightly since 2021. The tightly controlled QDII quotas have intensified competition for outbound investments, with such ETFs trading well above their net asset value. The brokerages said regulators had in particular requested the suspension of transactions involving ETFs that sought to match the performance of the MSCI USA 50, Nasdaq 100 and Japan’s Nikkei 225 indices. Separately, multiple Chinese brokerages that sell funds to retail investors through the QDII scheme said on Tuesday in public filings that regulators led by the Shanghai Stock Exchange were cracking down on “abnormal trading” in exchange traded funds that invest in foreign equities. JPMorgan did not respond to a request for comment, while Manulife declined to comment. The funds include some operated by JPMorgan Asset Management and Manulife Investment Management. Together, these account for about 30 per cent of all QDII funds that target non-Hong Kong overseas markets. Public filings show 79 Chinese QDII funds have suspended sales to retail investors and 53 have capped them. Buying into funds offered through the QDII scheme is the only legal way for Chinese retail investors to invest in foreign stocks and bonds.Īn increase in investor demand has caused some funds to hit their quota, while other funds have received directions from Chinese regulators to slow or in some cases stop sales of the funds. The government’s Qualified Domestic Institutional Investor scheme allows banks, brokerages and asset managers to bypass China’s strict capital controls. The Financial Times reported last August that China’s biggest fund houses were nearing government quota limits on offshore investment. The soaring popularity among retail investors of foreign-targeted funds has raised regulator concerns about capital outflows. The Beijing-based manager of one fund that focuses on US stocks said they had received informal instructions from the Shanghai Stock Exchange to reduce sales of such products targeting overseas markets after demand went “through the roof”.Ĭhinese authorities have repeatedly tried to halt a protracted sell-off in domestic equities over the past year, but the efforts have failed to improve battered sentiment, prompting many investors to look for higher yields elsewhere. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Ĭhinese authorities are tightening limits on capital outflows by restricting access to funds that invest in offshore securities as the country battles a brutal market rout.Ībout a third of Chinese funds that invest in foreign securities under a scheme that bypasses strict capital controls have announced in stock exchange notices they have suspended or capped sales to retail investors “to maintain stable operations and protect investors’ interests”.
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