China’s online shopping giant Alibaba saw more than $75 billion wiped off its market value after the shock late postponement of Ant Group’s initial public offering (IPO).

Ant had been set to go public on the Hong Kong and Shanghai exchanges today (5 November) in what would have been the largest public markets listing ever. The Chinese digital finance giant had hoped to raise around $34.5 billion.

Alibaba’s fortunes matter to UK investors given it is widely held by several fairly prominent investment trusts (see table).

The company behind top Chinese payment app Alipay, had intended to sell 11% of the business to new investors, which would have valued the entire business in the region of $313 billion. Chinese billionaire Jack Ma, the founder of both Alibaba and Ant, would have retained his 50% stake in Ant, while Alibaba owns 33% of the business.

But Ant’s IPO plans were thrown into chaos on Tuesday (3 November) after the Shanghai regulator raised questions over the digital finance giant’s ability to meet disclosure and listing conditions. The listing was pulled just a day after Jack Ma and other Ant executives were hauled in for what the exchange called ‘supervisory interviews’. In a following statement, the Shanghai exchange referred to ‘other major issues, including changes in ‘the financial technology regulatory environment’.

Demand for Ant stock has been sky-high with more than five million retail investors across mainland China having placed an estimated $2.8 trillion worth of orders, according to the Wall Street Journal. Ant terminated its institutional book building in Hong Kong early, signalling huge demand from fund managers also.

With the Ant IPO now stalled, and any revaluation of Alibaba’s stake on hold, Alibaba will need to look for other ways to recover lost market value.

Online shoppers in China could ride to Alibaba’s rescue with records expected to be shattered for the amount of money spent on Singles Day this year.

Singles Day is the world’s largest online sales festival. Since then, the event has grown in popularity not just in China but around the world.

Celebrated on 11 November, Singles Day is seen by many investors as a proxy for consumer spending in China.

Alibaba retail sales share was more than half the estimated $60.4 billion spent across all Chinese retail websites over the 24 hour spree in 2019.

That’s double what Amazon generates in an entire month, according to a report by consulting firm Bain & Company. Amazon’s Prime Day event last month is predicted to have generated around $9.9 billion, according to eMarketeer data.

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