The last-minute halt of the Ant Group IPO doesn't mean that China wants to divert from the chosen path of opening its financial market. It simply means that the government will look more closely into the business of internet giants. For UBS, the signs for its business in China are still positive, says its top representative in the region.
The Chinese regulator may have stepped in at a very late stage when it halted the initial public offering of Ant Group in November, but it was right to do so, said David Chin, head of UBS' business in China, in an interview with «Neuen Zürcher Zeitung» (behind paywall in German). The business of the internet giants contains an element of risk that may become relevant for the system if the regulator doesn't provide clear guidelines.
The decision doesn't however mean that China won't continue on its path to a more open financial market. Quite to the contrary, China's decision to open and reform the financial market will be the highlight of the coming years, Chin added.
UBS Joint Venture Increase
Foreign financial-services companies can add to their stakes in local joint ventures. UBS for instance will probably further increase its holding in the UBS Securities joint venture from the current 51 percent, Chin said.
The veteran UBS banker doesn't see the decision to halt the Ant Group IPO as a real setback for the stock exchanges of Hong Kong and Shanghai. Hong Kong for instance will likely see a number of securities placements in 2021 of attractive Chinese companies.
