Chinese Stocks Gain $70 Billion As Ant Group’s New $1.5 Billion Plan Fuels Investor Optimism

Mục Lục

Topline

Chinese stocks listed on U.S. exchanges soared Wednesday, far outpacing the broader market, as investors latched onto a rare easing of business regulations from Beijing.

It was a banner day for U.S.-listed Chinese stocks.

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Key Facts

Shares of the 10 largest Chinese-based companies traded in New York gained a whopping $70 billion in market capitalization on Wednesday after the Chinese government greenlighted a capital increase proposal from Ant Group, the financial technology giant led by billionaire Jack Ma, whose record-setting initial public offering was axed by Beijing in 2020 as authorities cracked down on China’s growing technology sector.

Shares of Alibaba, the online retailing titan and one-third owner of Ant Group which is by far the largest U.S.-listed Chinese firm, skyrocketed 13% in the U.S., adding $40 billion in market cap, while fellow e-commerce firms Pinduoduo and JD.com gained 8% and 15%.

Meanwhile, major U.S. stock indexes were flat, with the Dow Jones Industrial Average, S&P 500 and tech-heavy Nasdaq each adding less than 0.8%.

Key Background

The squashing of Ant Group’s $34.5 billion IPO in 2020 set forth an increasingly unfavorable environment for the private sector in China, with the strictest pandemic restrictions among any major economy, which have recently eased, also weighing on companies. Formerly China’s wealthiest man, Ma disappeared from the public eye in late 2020 after the billionaire railed against his home country’s strict regulatory conditions. Ma is now living in Tokyo with his family, according to a November Financial Times report. We estimate Ma to be worth $24.5 billion, up 5% Wednesday following Alibaba’s stock surge and making him the 59th-wealthiest person in the world. Ma’s fortune is down more than 50% since late 2020.

Big Number

$2.3 billion. That’s how much the fortune of Pinduoduo founder Colin Zheng Huang rose Wednesday, the fourth-largest increase in net worth in the world, according to Forbes’ real-time billionaire tracker. Huang’s fortune swelled by $11.1 billion last year, amid a global downturn, making him the third-largest billionaire gainer of 2022.

Tangent

The world’s wealthiest man, LVMH CEO Bernard Arnault, added $8.9 billion to his fortune Wednesday, the largest daily gain of any billionaire on the planet, after shares of his luxury firm jumped 5% as it continues to rally amid the reopening of the crucial Chinese market, with Asia accounting for more than 40% of LVMH’s sales.