China Traders Eyeing Ant IPO Will Get More Access With New Funds

Chinese investors hoping to get a slice of Ant Group Co.’s massive stock debut can boost their chances by buying into new funds that are kick-starting sales this week.

Five firms have agreed to subscribe to Ant’s Shanghai listing via new funds, Ant said in a filing Tuesday. The fintech giant’s shares in the new funds will be capped at 10%, based on existing rules for mutual funds.

Jack Ma’s Ant Group is said to be seeking to raise at least $35 billion in its initial public offering after assessing early investor interest, putting the firm on track for a record debut sale. The IPO target is based on a company valuation of about $250 billion, according to people familiar with the situation.

The five new funds, each with a cap of 12 billion yuan ($1.8 billion), will be on sale from Sept. 25 to Oct. 9, according to statements posted on the websites of China Asset Management Co., E Fund Management Co., China Universal Asset Management Co., Zhong Ou Asset Management Co. and Penghua Fund Management Co.

The announcements of the new products came just hours after four exchange-traded funds tracking Shanghai’s Star 50 Index opened for subscription, and days after Ant Group got the green light to float shares on the Star venue for tech startups. Ant could seek to list in Hong Kong and Shanghai as early as next month.

The funds will give investors with insufficient capital to buy stocks directly on the Star board more leeway and boost their probability of winning an allocation of shares. Individual investors are required to have a minimum of 500,000 yuan in their stock accounts before they can trade on the board, where new offerings are typically hundreds and even thousands times oversubscribed.

©2020 Bloomberg L.P.

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