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Ant Group’s IPO Plan, Beijing’s Blockchain Blueprint and CSRC’s Approval of Equity Trading Pilot — China Market Watch

2020.07.23 Matthew Lam

The stock market in China and Hong Kong saw a mild recovery this week. The Shanghai SE Composite and CSI 300 currently run at 3,325 and 4,712, with rebounds of 3.86% and 4.34% respectively over the week. The Hang Seng Index also posted a weekly value rise of 3.58%, currently standing at 25,203.

The Hang Seng Index received an early boost this week due to the announcement of the Hang Seng Tech Index, which will debut on July 27, and will track the 30 largest technology companies listed in Hong Kong. Some of these big names include Alibaba, Tencent Holdings, Meituan Dianping, Xiaomi and Sunny Optical. The announcement of a concurrent IPO plan by Ant Group on July 20 also serves as another boost for both the Hong Kong and China stock market.

On the contrary, the diplomatic tension between China and the U.S. rose again this week. The U.S ordered China to close its consulate in Houston on July 22, reportedly in a bid to protect the intellectual property and private information of Americans. China condemned this and believed the move to be aimed at “political provocation.” In return, the country accused the U.S. of posting death threats to the Chinese embassy. These ongoing tensions led to a daily drop of 0.24% and 0.22% for Shanghai SE Composite and CSI 300, respectively.

Meanwhile, the SZSE Blockchain 50 index currently stands at 4,064, a weekly rise of 3.68%. Among the 50 stocks included in the index, Jiangsu Akcome Solar Science & Technology (002610.SZ) is the daily top gainer, with a 10.16% increase, while the Client Service International (300663.SZ) is the top loser, with a weekly value of -5.38%.

Performance of Chinese market indexes. Source: Trading Economics, Investing.com

News of the Week

From Ant Group’s concurrent initial public offering plan to Beijing’s blockchain blueprint and China Security Regulatory Commission’s approval of a blockchain pilot in equity trading, OKEx Insights takes a look at this week’s top three crypto news stories from China and Hong Kong.

Ant Group plans a concurrent IPO in Hong Kong and Shanghai

Ant Group, an affiliate of e-commerce giant Alibaba, is reportedly planning to conduct a concurrent IPO on the Hong Kong Stock Exchange and the STAR Board of Shanghai’s stock exchange. Known for its landmark New York IPO of $21.77 billion in 2014, Alibaba conducted its second IPO in Hong Kong with $12.9 billion raised. To better reflect the firm’s business model, Ant Financial rebranded to Ant Group in June.

Apart from owning Alipay — one of the most popular digital payment apps in China, with over 900 million users — Ant Group offers other digital financial services in wealth management, loans and insurance, etc. As of the end of the fiscal year on March 31, these digital financial services accounted for more than 50% of Ant Group’s overall revenue.

Alipay has been an early mover in blockchain technology since 2015. Its parent company, Alibaba, is active in the space and topped the global blockchain patent applications ranking in 2019.

Built on the aforementioned expertise and R&D in blockchain technology, the Hangzhou-based group launched its blockchain-as-a-service platform, OpenChain, in April, which enables small and medium-sized enterprises to build decentralized applications, otherwise known as DApps. The fixed asset registration center of Zhuhai could be the latest user of OpenChain, as it recently signed an agreement with Ant Group to streamline mortgage applications using blockchain.

Key takeaways

  • Ant Group, rebranded from Ant Financial in June, is seeking a concurrent IPO in Hong Kong and Shanghai.
  • Ant Group is an affiliate of tech giant Alibaba and is the parent company of Alipay.
  • Ant Group is also active in the blockchain space, with its own BaaS platform OpenChain launched in April.

Beijing released its first blockchain application blueprint

On July 16, the Beijing government released its first blockchain blueprint on government services — according to which, 140 government services applications in China are using blockchain to save costs around an average of 40%.

The blueprint highlights three categories of applications: data sharing and exchange, business collaborative processing, and storage of electronic certificates.

For the last category, the blueprint illustrates the case of fixed assets registration. Due to the use of blockchain technology, the relevant information is transparent and traceable by government authorities, such as the municipal planning commission, the tax bureau and the public security bureau.

The blockchain blueprint is consistent with Beijing’s continuous blockchain push, following the “Beijing Municipal Blockchain Innovation Development Action Plan (2020–2022)” released on July 2. The Beijing government identified four pillars in blockchain to support economic growth: innovation in blockchain technology, industrial development, blockchain use cases, and talent cultivation.

Key takeaways

  • The Beijing government released its first blockchain blueprint in government services.
  • On average, blockchain use cases in government services result in 40% cost savings.
  • There are three featured categories in the blueprint: data sharing and exchange, business collaborative processing, and storage of electronic certificates.

CSRC approved five equity trading centers for a blockchain pilot

On July 7, the China Security Regulatory Commission issued a statement approving blockchain pilots of five regional equity trading centers. The five regions are Beijing, Shanghai, Jiangsu, Zhejiang and Shenzhen. This announcement was first made public by the Beijing Local Financial Supervision and Administration on July 21.

As stated in the announcement, Beijing’s equity trading center has reportedly built a “relatively perfect” infrastructure for equity registration, custody and transaction transfer. 

Beijing’s equity trading center has been an early explorer in blockchain technology since 2017. The center partnered with the Shenzhen Stock Exchange to launch a blockchain to track the credit reference of equity market intermediaries. 

In addition, Beijing’s equity trading center will be collaborating with the China Securities Depository and Clearing Corporation for the pilot launch of backend infrastructure.

As of June 30, Beijing’s equity trading center held a total of 21.07 billion RMB ($3 billion) in custody. The center serves nine commercial banks and more than 1,000 unlisted joint-stock companies.

Key takeaways

  • The CSRC approved blockchain pilots for equity trading centers in Beijing, Shanghai, Jiangsu, Zhejiang and Shenzhen.
  • In November 2017, Beijing’s equity trading center partnered with the Shenzhen Stock Exchange to launch a blockchain that tracks the credit reference of equity market intermediaries.


Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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