China's Ant Group has announced a surprise share buyback that values the fintech giant at $78.5 billion, well below the $315 billion touted in an abandoned IPO in 2020, in a move that may let some investors exit.
GARY NG, ASIA PACIFIC SENIOR ECONOMIST AT NATIXIS IN HONG KONG:
"The major pressure that a lot of these companies have been facing is really this bad sentiment. There are a few things that have changed from last Friday. The first is that some companies have been fined a significant amount but I think that offers, like a certain comfort to the market that possibly this regulatory tightening is actually getting to the end or basically cannot be worse than before.
"And second, of course, we're talking about the share buyback plan. I think that also helps boosting the sentiment of the share price.""Ant Group has announced a repurchase plan, which reflects a significant decrease in the company's valuation compared to its previous preparation for IPO. However, this news did not cause a drop in Alibaba's stock price, but instead showed a clear upward trend.
"Looking back over the past few years, Alibaba's stock price has experienced a significant decline, mainly due to concerns in the market about the negative impact of industry regulation on the company. If investors can eliminate their concerns about this aspect of Alibaba, it will help the company's stock price rebound in the future.""Their share prices have strongly rebound today mainly driven by the expectation that regulatory pressure from mainland government will ease.
Reporting By Xie Yu in Hong Kong, Yantoultra Ngui in Singapore and Scott Murdoch in Sydney; Compiled by Anne Marie Roantree; Editing by Jamie Freed
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