Jack Ma’s Ant IPO Lures $2.8 Trillion in Growing Investor Frenzy


(Bloomberg) — Chen Wu frantically clicked the order button on his online brokerage account as the clock struck noon.

Like thousands of individual investors in Hong Kong and across China, the 35-year-old software developer was desperate for a piece of Ant Group Co.’s initial public offering. His brokerage was allowing a small number of clients to supercharge their bets on Ant using 33 times leverage, and the offer was only available on a first-come, first-served basis. Wu had to act fast.

“When it was released at noon, I refreshed my page again and again, clicked and clicked,” he said on Tuesday after securing a HK$5.7 million ($735,322) block of Ant shares, equivalent to more than 80% of his existing equity portfolio. “I got it around 12:01 p.m. and the quota ran out within minutes. I was lucky.”

Ant may not be a household name in most of the world, but the Chinese fintech behemoth controlled by Jack Ma has set off an investor frenzy for the history books. Brokers in Hong Kong say the IPO is generating unprecedented client interest, with one firm’s order system briefly shutting down on Tuesday after becoming overwhelmed by subscription requests. Bids for the retail portion of Ant’s concurrent listing in Shanghai totaled a record 19.05 trillion yuan ($2.8 trillion) on Thursday, exceeding supply by more than 870 times.

The stampede is fueling predictions of a first-day pop when Ant is due to start trading on Nov. 5, even though skeptics warn of risks including the U.S. election, tightening regulations in China and rising Covid-19 infections worldwide.

Read more: A Pessimist’s Guide to the Ant IPO

Whether Ant surges or not, its record-breaking $35 billion IPO represents a major vote of confidence in a company that could end up shaping the future of global finance. It also underscores China Inc.’s ability to marshal huge amounts of capital without tapping American markets, a win for Beijing as it tries to reduce its vulnerability to the threat of U.S. financial sanctions.

Ant is no doubt benefiting from the unusually buoyant mood among retail investors globally, but it’s not just the mom-and-pop crowd driving demand. Big-name money managers including Temasek Holdings Pte, T. Rowe Price Group Inc. and UBS Asset Management are also angling for allocations. Institutions and strategic investors may take up about 96% of the offering in Shanghai and 97.5% in Hong Kong, according to Ant’s prospectus, although the figures may change due to clawback and greenshoe provisions.

Retail investors are still likely to have a significant impact once trading begins — particularly in Shanghai where individuals drive the vast majority of daily turnover. About 5.16 million retail accounts subscribed for Ant shares on the city’s Star market, where traders are required to have a minimum 500,000 yuan in their accounts.

Meanwhile in Hong Kong, investors are taking advantage of historically low interest rates to amplify their bets with borrowed money. Futu Securities, the brokerage that suffered a brief outage due to a flood of orders on Tuesday, said its margin quota for Ant was used up in about 20 minutes. Banks and brokerages in the city have so far provided about HK$519 billion of margin loans to retail punters, according to the Hong Kong Economic Journal.

“There has been unprecedented investor interest,” said Jasper Chan, assistant manager of corporate finance at Phillip Securities, which allocated all of the HK$20 billion it set aside for Ant margin loans on the first day they became available. Chan said demand for the IPO has been more broad-based than usual because of the small minimum lot size of 50 shares, which equates to about HK$4,040.

Yuki Chung, a 30-year-old university teaching assistant in Hong Kong, said she’s planning to bid for HK$500,000 of Ant shares, 90% of which will be funded with borrowed money. “Margin rates offered by banks can be less than 1%, which is definitely very attractive,” she said. “Everyone is taking part in the IPO, so I feel like I should too. I don’t want to lose out.”

Others are wary of placing too much faith in a rally. Elle Lam, a 28-year-old media professional who has invested in several Hong Kong IPOs this year, plans to order just one 50-share lot of Ant, using the rest of her available cash to bid on the Hong Kong government’s upcoming issuance of inflation-linked bonds.

“People are certainly too hyped up,” Lam said. “I think Ant’s valuation is too expensive, so the gain on the debut day could be limited.”

The IPO price translates into a multiple of about 36 times estimated 2021 earnings, surpassing average valuations for both global payments companies and large Hong Kong-listed tech stocks, according to Bloomberg Intelligence.

Still, rich valuations haven’t been a deterrent for Hong Kong IPOs of late. Bottled water giant Nongfu Spring Co., which debuted in the city last month after receiving orders for 1,148 times the amount of shares it initially set aside for retail investors, is now valued at about 55 times estimated earnings after soaring 65% from its offering price.

“I think Ant can rise 30%-40% in the first day,” said Wu, the software developer who took on debt to buy shares. “I’m not too worried about the performance.”

(Updates margin loan figure in ninth paragraph.)

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Steve Mnuchin $1.8 Trillion Covid Relief Package Falters


Steve Mnuchin $1.8 Trillion Covid Relief Package Falters

Senate Republicans have joined with House Democrats in opposition to the Covid Relief Package.

Seratary Mnuchin Official Picture

On Friday Treasury Secretary Steve Mnuchin released the Trump administration’s new $1.8 trillion package of relief funding for those hurting from the Covid-19 recession. But Democrats balked at the offer saying that they wanted at least $400 million more.

Drew Hammill, the deputy chief of staff to the Democratic Speaker of the House of Representatives Nancy Pelosi, tweeted the following in response. “The Speaker & Secretary Mnuchin spoke at 3:00 pm today for 40 minutes. Their conversation focused on determining whether there is any prospect of an imminent agreement on a comprehensive bill. The Secretary made clear the President’s interest in reaching such an agreement.

“The Speaker pointed out that, unfortunately, the White House Communications Director contradicted that assertion during their call. The Speaker trusts that the Secretary speaks for the President.

In a letter to Democratic colleagues Saturday the Speaker herself described the offer as, “one step forward, two steps back,” and that it was, “insufficient in meeting families’ needs.”

Speaker Nancy Pelosi took the opportunity to slam the President accusing Donald Trump of wanting to have total control over how any money is distributed.

“When the President talks about wanting a bigger relief package, his proposal appears to mean that he wants more money at his discretion to grant or withhold, rather than agreeing on language prescribing how we honor our workers, crush the virus and put money in the pockets of workers,” she said.

And now Republicans have joined Democrats in rejecting the package, albeit for the opposite reasons. Republicans who control the U.S. Senate think that it spends too much money.

So it is possible that no formal deal will be reached before the elections in November.


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Russia’s National Wealth Fund seen at around 12.5 trillion roubles by end-2020: TASS cites finance minister



FILE PHOTO: Russian Finance Minister Anton Siluanov delivers a speech during a session of the lower house of parliament in Moscow, Russia March 11, 2020. REUTERS/Evgenia Novozhenina

October 25, 2020

MOSCOW (Reuters) – Russia’s Finance Minister Anton Siluanov said on Sunday that the size of the National Wealth Fund will stand at around 12.5 trillion roubles ($164.26 billion) by the end of this year, the TASS news agency cited him as saying.

The government does not expect to spend more from the fund than planned to restore the Russian economy, and will only use the funds when oil prices are low, he was cited as saying.

(Reporting by Vladimir Soldatkin; Writing by Polina Ivanova; Editing by Catherine Evans)





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Faster coronavirus recovery could add $9 trillion to global income by 2025, IMF’s Georgieva says



FILE PHOTO: IMF Managing Director Kristalina Georgieva speaks during a conference hosted by the Vatican on economic solidarity, at the Vatican, February 5, 2020. REUTERS/Remo Casilli

October 15, 2020

By David Lawder and Rodrigo Campos

WASHINGTON/NEW YORK (Reuters) – Speeding up the recovery from the coronavirus recession can add $9 trillion in global income by 2025, International Monetary Fund Managing Director Kristalina Georgieva said on Thursday, adding that this depended on strong international cooperation, including on vaccines.

Speaking at a news conference after a meeting of the IMF’s steering committee, Georgieva also called on the United States and China to keep up strong economic stimulus that can help boost global recovery.

“If we may make fast progress everywhere, we could speed up the recovery. And we can add almost $9 trillion to global income by 2025, and that in turn could help narrow the income gap between richer and poorer nations,” Georgieva said.

“We need strong international cooperation and this is most urgent today for vaccine development and distribution,” she said.

Equitable and affordable access to COVID-19 therapeutics and vaccines globally will be key to avoid an economic recovery that leaves “long lasting scars” according to the steering committee’s statement.

MORE PARTICIPANTS

The committee said private creditors’ and official bilateral creditors’ participation in debt relief for poor countries is essential, with Georgieva adding that “further private sector participation is still needed, and it remains an outstanding issue.”

The G20 on Wednesday approved a six-month extension to mid 2021 of the Debt Service Suspension Initiative (DSSI) that freezes official bilateral debt payments, and said they would consider a further six-month extension in April. But private creditors and lenders outside the Paris Club are not fully participating.

“We are disappointed by the absence of progress of private creditors’ participation in the DSSI, and strongly encourage them to participate on comparable terms when requested by eligible countries,” the steering committee said, while encouraging “the full participation of official bilateral creditors.”

(Reporting by David Lawder and Rodrigo Campos; Editing by Nick Zieminski)





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Not a lot for Centre in trillion dollar deficit Budget


By ERWIN CHLANDA

There is significant additional money in the Budget for roads across the NT but “nothing I can specifically identify for Central Australia,” says Labor Member for Lingiari Warren Snowdon.

He says he could not find any allocation for further sealing of the Outback Way which links Queensland and WA via Alice Springs.

“I will re-look at it, but I haven’t seen it.”

(The Alice Springs News was also unable to find any Outback Way allocation.)

“There is some money for Uluru – Kata Tjuta for upgrading the cultural centre, walking tracks, a viewing platform, upgrading to shelters, water stations,” says Mr Snowdon, but he can’t identify at the moment the total allocated.

“There is around $60m for infrastructure upgrades at Mutitjulu.

“Apart from that there is nothing new in this Budget for Central Australia.

“There is $47m less for the NT general revenue and $89.9m less in GST revenue. That’s money the NT Government won’t have to spend in the Northern Territory.

(Surprisingly, NT Opposition Leader and Shadow Treasurer Lia Finocchiaro says in a media release that there is an increase of $222m in the Territory’s GST payments.) 

“In terms of broader measures the incentive to take on jobseekers under 35 will have some impact in Central Australia, but of course the majority of them are living in remote communities where there are very few job opportunities.

“At the moment there is no Budget increase for Jobseeker beyond December which will mean they are going back to $40 a day.

“Businesses will be able to access tax concessions in the Budget and hopefully that will stimulate some activity in Central Australia.

“There is some money for tourism infrastructure as a COVID measure,” says Mr Snowdon.

“This Budget is raking up a trillion dollars worth of debt. Does it do enough for Central Australia? I don’t think so. I am very worried about the bush, no significant money for Aboriginal health, there is a small amount for Trachoma, eye and ear health – that’s it.”

IMAGE at top: Mutitjulu (AAP photo) and inset: Unsealed section of the Outback Way.



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Australian budget 2020: Treasurer forecasts net debt to reach just under $1 trillion – video | Australia news


In his budget speech on Tuesday night, the treasurer, Josh Frydenberg, declared that ‘in 2020, Australians had been tested like never before’ before announcing $98bn of spending and business concessions.  

The economic plan will see the deficit reach $213.7bn this year. Net debt is also forecast to peak at a record $966bn or 44% of GDP by June 2024.



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Apple reaches $2 trillion milestone as tech fortunes soar during coronavirus pandemic


Apple has become the first US company to boast a market value of $2 trillion (€1.7 trillion) as technology continues to reshape the world and people”s lives.

The iPhone maker reached the milestone in Wednesday’s early stock market trading when its shares surpassed $467.77 (€394.87).

The stock later backtracked, but it didn’t diminish a remarkable achievement that came just two years after Apple became the first US company with a $1 trillion (€844 billion) market value. It comes amid a devastating pandemic that has shoved the world economy into a deep recession and caused unemployment rates to soar to the worst levels since the Great Depression nearly a century ago.

But Apple and other well-established tech giants such as Microsoft, Google, Amazon, Facebook and Netflix have thrived during the upheaval as the pandemic has forced millions of people to work, attend classes, shop and entertain themselves at home.

That, in turn, has made technology even more crucial, a factor that has caused investors to snap up the stocks of the industry’s biggest players, as well as relative newcomers, such as video conferencing service Zoom, which has seen its shares quadruple so far this year.

Apple’s stock has climbed nearly 60 per cent this year. In recent weeks, the rally has been bolstered by excitement over a four-for-one stock split that Apple announced late last month in an effort to make its shares more affordable to a wider swath of investors.

The broader boom in tech stocks also has helped the benchmark S&P 500 index reach new highs after steep declines earlier in the year. Apple, Microsoft, Amazon, Facebook and Google’s parent company, Alphabet account for nearly 23 per cent of the S&P 500’s entire value.

Apple isn’t the first company in the world to reach a market value of $2 trillion. That honour belongs to energy producer Saudi Aramco, which attained it in December 2019. Saudi Aramco now trails Apple with a market value of about $1.8 trillion (€1.5 trillion).

Now that technology has clearly become the oil of the 21st century, other industry leaders could soon be joining Apple in the $2 trillion club. Many industry analysts are predicting Amazon, Microsoft and Alphabet could eclipse the milestone in the upcoming months too.

But regulators and lawmakers looking into allegations that Apple, Amazon, Google and Facebook have been illegally abusing their power to stifle competition could spook investors if their investigations result in moves that undercut the companies’ profits.

Not all technology companies are doing as well as they were before the pandemic. Google, for instance, suffered the first quarterly revenue decline from the previous year in its history during the April-June period as the advertising sales that generate most of its profit tapered off amid pandemic-driven lockdowns across the US.

But Apple has fared extraordinarily well, buoyed by the timely April debut of a new iPhone model priced at about $400 (€338), 40 to 60 per cent less than the fancier devices that it released last fall. The company will face another litmus test in October when it is expected to unveil a line-up of new iPhones, including a model capable of connection on the next generation of ultra-fast wireless networks known as 5G.

The next wave of high-priced iPhones, coming out a few weeks later than usual because of production delays caused by the pandemic, are expected to test the depths of Apple’s customer loyalty as well how much people are willing to spend during tough times for most people outside the technology industry.



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Apple bites into history, is first US firm to reach $2 trillion in market cap


It took Apple 42 years to reach $1 trillion in value. It took it just two more years to get to $2 trillion.
Even more stunning: All of Apple’s second $1 trillion came in the past 21 weeks, while the global economy shrank faster than ever before in the coronavirus pandemic.
On Wednesday, Apple became the first US company to hit a $2 trillion valuation when its shares climbed 1.2% to $467.8 in morning trading. It was another milestone for the maker of iPhones, Mac computers and Apple Watches, cementing its title as the world’s most valuable public company and punctuating how Covid-19 has been a bonanza for the tech giants.

Apple is the second publicly traded company to hit $2 trillion. Saudi Aramco, Saudi Arabia’s state-owned oil company, went public in December and briefly exceeded the $2 trillion mark. It remained the world’s most valuable company until Apple surpassed it last month.
Apple’s rapid rise to $2 trillion is particularly astonishing because the company has not done much new in the past two years. It has simply built one of the tech industry’s most effective moneymakers, which has such a firm grip over how people communicate, entertain themselves and shop that it no longer relies on groundbreaking inventions to keep the business humming.
Under its chief executive, Tim Cook, Apple’s most important innovation in recent years has arguably been its nearly unrivalled ability to generate profits. Cook has built a sophisticated global supply chain to produce billions of devices — most assembled in China — and leaned into a product line designed to lock customers into its ecosystem so they buy new gadgets every few years and pay monthly fees to use Apple’s suite of digital services.
Apple has also grown despite its size by extracting more money from the companies that run businesses on iPhone apps, drawing accusations that its 30% cut of some app revenues is unfair.
The Silicon Valley company’s business has been only further entrenched by Covid-19, which has forced people to work, learn and socialise virtually. From April through June, even as Apple shuttered many of its retail stores because of the virus, it posted $11.25 billion in profits, up 12% from a year ago. It increased its sales of every product and in every part of the world.
Apple has also wielded another powerful tool to boost its valuation and enrich its investors and executives: stock buybacks. Since the company’s value hit $1 trillion, it has returned $175.6 billion to shareholders, including $141 billion in stock buybacks. Apple has repurchased more than $360 billion of its own shares since 2012, by far the most of any company, and has announced plans to spend at least tens of billions of dollars more on Apple stock.



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Apple becomes the first US company to be valued at $US2 trillion


New York: Apple is the first US company to boast a market value of $US2 trillion ($2.7 trillion), just two years after it became the first to reach $US1 trillion.

Apple shares have gained nearly 60 per cent this year as the company overcame the shutdown of factories in China that produce the iPhone and the closure of its retail sales amid the coronavirus pandemic.

Apple recently reported blowout earnings for the April-June quarter.Credit:James Alcock

The company’s hugely loyal customer base trusts its products so much that they continued to buy iPhones and other devices online while stuck at home. Apple recently reported blowout earnings for the April-June quarter.

An upcoming four-for-one stock split that will make Apple’s shares more affordable to more investors also sparked a rally after it was announced three weeks ago.



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It would cost $1 trillion to move global supply chains out of China—and that might be a bargain for some companies


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