Punters feel the pinch as Ant rolls out IPO refunds

The Hongkong and Shanghai Banking Corporation and Hang Seng Bank (0011) will not return the interest they charged on margin loans as well as the subscription fee for Ant Group's IPO, though some brokerages are waiving these charges.

A spokesperson for the Hongkong and Shanghai Banking Corporation said that unsuccessful subscribers for the IPO were refunded yesterday, while those who had been originally allocated shares would be refunded tomorrow.

The spokesperson also pointed out that if a customer applied for an IPO subscription loan earlier, the relevant interest and handling fee will be deducted from the refund as of November 3. This means that neither the handling fee nor the interest will be refunded.

However, customers who applied through digital channels won't have to pay handling fees. According to the bank, 96 percent of customers subscribed through digital channels.

Handling fees have been waived for most customers but they will still have to pay interest.

The Hongkong and Shanghai Banking Corporation received around HK$150 billion in subscriptions for the aborted IPO as of October 29. Each customer subscribed for about 300 board lots on average. Based on this calculation, each customer has an average investment of HK$1.2 million. Based on 90 percent margin and a minimum interest rate of 0.48 percent, the six-day margin interest works out to only HK$86.

Hang Seng Bank (0011) said that after receiving refunds from the relevant institutions, it would arrange refunds to customers on the same day. This means that Hang Seng will also follow standard procedure and not refund additional handling fees and interest on margin loans to customers.

However, most of the brokerages and banks did not charge retail investors fees for the aborted initial public offering.

Dah Sing Banking (2356) said that all relevant IPO loan interest and subscription fees would be refunded to customers who subscribed for the shares through the bank's securities services, AND Relevant fees would be returned according to their procedures.

Futu Securities too has waived all margin financing interest and subscription fees.

Bright Smart Securities (1428) has called on the Securities and Futures Commission to urge Ant Group to compensate investors who had subscribed on margin loans.

Meanwhile, the China Banking and Insurance Regulatory Commission plans to discourage lenders from using Ant's platforms and has already asked some to ensure their portfolios are compliant with stringent draft regulations announced on Monday.

The mainland regulatory authorities notified Ant that it must meet the new capital regulations imposed on financial holding companies in early November before proceeding with an initial public offering.

Foreign ministry spokesman Zhao Lijian said that the listing had been suspended in order to "maintain the stability of the capital market" and protect investors, Ant Group's listing was suspended, a foreign ministry spokesman, Zhao Lijian, said Wednesday.

In other news, Ant has denied reports that it will relaunch the IPO in six months.