Following news that Ant founder Jack Ma will relinquish control of the fintech behemoth following an overhaul, shares of listed Chinese companies with Ant Group as a significant stakeholder increased on Monday.
Alibaba’s (9988.HK) Hong Kong-listed shares increased 7%.
Along with Longshine Technology Group Co Ltd (300682.SZ), Jilin Zhengyuan (003029.SZ), Shanghai Golden Bridge Infotech Co (603918.SS), Orbbec Inc (688322.SS), and Hundsun Technologies (600570.SS), all of these companies saw an increase in share prices. Ant indirectly has holdings in those businesses ranging from little more than 5% to more than 20%.
Jack Ma, the company’s founder, will relinquish control of it, Ant announced over the weekend.
The reform aims to put an end to the regulatory blitz that began as soon as its massive stock market debut was derailed two years ago.
Jack Ma’s decision to relinquish control of Ant and other companies, according to Redmond Wong, Greater China market strategist at Saxo Markets, Hong Kong, will help reduce some uncertainty and open the door for the group’s business to grow and develop.
Since the adjustment was probably the result of negotiations with the authorities, it should have allayed some of their worries about the group, according to Wong. And the perception of investors toward the Chinese internet industry is probably going to get better still.
The rectification of the financial operations of 14 platform companies has “basically been completed,” according to Guo Shuqing, head of China’s Banking and Insurance Regulatory Commission (CBIRC), in an interview with the country’s official Xinhua news agency that was published on January 7. However, there are still a few issues that need to be resolved. Guo did not mention the brands.
Guo was quoted as adding that following that, authorities will embrace “normalized regulation” and encourage platform companies to operate legally.