CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Ant Group IPO: strong demand could boost share price

Oversubscribed by 872 times for the retail portion of Ant Group’s IPO, raging demand for Alibaba Group's fintech spinoff look set to put the company on the charts come 5 November.

Positive outlook, a popular name

As described in an earlier piece on Ant Group’s initial public offering (IPO), Ant Group is known to be gunning for the world’s largest IPO title, topping Saudi Aramco’s $25.6 billion offering last December. This is no small feat, but one would have already seen Ant’s IPO attracting $3 trillion in retail orders alone, the equivalent of the UK’s gross domestic product (GDP).

Dual listing of Ant Group’s shares between Shanghai’s STAR Market and Hong Kong is expected to draw interests in both markets from the Thursday, 5 November, commencement of trading. Spinning off from Alibaba Group, which itself had seen 43.7% year-to-date gains as of end October, Ant Group equally packs the punch in terms of being a promising online services firm.

Ant Group had notably posted a 1000% profit growth in the first half (H1) of 2019. The familiar name for its Chinese audience and beyond was also seen clocking a one billion annual active users count as of 30 June 2020 on its main Alipay mobile payments app.

Want to trade Ant Group's IPO? Open an account to get started as soon as Ant Group lists

Retail drives trade in China

While IPOs had broadly attracted huge retail interests into 2020, particularly in the Hong Kong space and with many Chinese names, Ant’s impending IPO’s retail interest can only be described as behemoth. Given the fact that retail investors are the key players in the Chinese equity space, this early indication with the oversubscription also paints a positive picture headed into the IPO date. One suspects that the demand could potentially spill over into the actual trading commencement, making the opening session one to watch.

Arguments against a continued surge would however lie with valuations at this point seeing the expected IPO market capitalisation at over 30 times of forecasted earnings, though this is comparable to Alibaba Group at this point. Interests for Ant may also be influenced by the broader market picture given the US Presidential Election set just prior to its IPO.

How to trade the Ant Group IPO

Ant Group will be open for trading on Thursday, 5 November, on both the Hong Kong and Shanghai exchange, one to track the trend with the commencement. Besides Ant Group, the swing in prices may also ripple through to Alibaba Group.

Notably, Ant Group had been reported to trade at 50% premium in Hong Kong grey market according to Bloomberg reflecting the strong interest expected on opening day.

You’ll be able to take a position on day one of its Hong Kong listing with us via CFDs.

Find out more about how to trade Ant Group’s IPO

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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