Market cheers Ant's 10.5b yuan cash infusion

Staff reporter and agencies

Hong Kong's Hang Seng Index closed 647 points higher with Alibaba (9988) soaring nearly 9 percent after Ant got the green light to raise 10.5 billion yuan (HK$11.9 billion) for its consumer finance unit, paving the way for the finance affiliate's much-delayed and anticipated initial public offering.

The China Banking and Insurance Regulatory Commission division in Chongqing green-lit Ant's plans to boost Chongqing Ant Consumer Finance's capital from 8 billion to 18.5 billion yuan, according to a notice on December 30.

Ant, which contributed 5.25 billion yuan as part of the plan, will control half of its shares after the deal, while a unit owned by the city of Hangzhou will hold 10 percent, becoming the second-biggest shareholder.

The agreement resolves a key hurdle for Ant as it seeks to meet requirements from regulators following a crackdown on its business after its record IPO was torpedoed in 2020. Daiwa expects Ant could launch the IPO as early as the second half of the year after the regulatory overhaul ends.

The green light is another sign that Beijing is softening its stance on its giant internet sector, traditionally a big driver of growth, as the world's No. 2 economy sputters.

Tencent (0700) and Meituan (3690) climbed 4.58 and 2.55 percent respectively, while JD.com (9618) surged 7.21 percent.

Shares of Jack Ma Yun's Alibaba jumped by 8.74 percent to HK$96.4 after the news and Alibaba Health Information Technology (0241) soared 11.28 percent, closing at HK$7.4.

The benchmark HSI rose by 3.22 percent to 20,793 points and about HK$149.6 billion turnover was recorded.

Most blue-chip stocks rose.

Mainland developer Longfor (0960) was the best-performing blue chip, surging nearly 12 percent amid reports that Chinese financial institutions and regulators are making new lists of "quality developers" to support them.

HSBC (0005) and CK Hutchison (0001) rose by 2.67 percent and 1.37 percent respectively.

Most gaming stocks rose over 1 percent, except Macau Legend (1680) which fell 5.88 percent as it ceased its VIP gaming promotion business in Macau.

Chip stocks were mixed as Semiconductor Manufacturing International Corporation (0981) rose by 0.83 percent but Hua Hong Semiconductor (1347) fell by 0.54 percent, amid reports that China has paused massive investments to boost its chip industry.

Some Apple-related stocks continued to fall. Sunny Optical (2382) tumbled by 10.1 percent, while Apple's market value slumped below US$2 trillion (HK$15.6 trillion).

In other news, the offshore yuan rose 0.51 percent against the US dollar to 6.8887, nearly its strongest over four months.