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Friday, November 06, 2020, 22:50
HKMA: Ant will remain an important firm in Hong Kong
By Bloomberg
Friday, November 06, 2020, 22:50 By Bloomberg

The Ant Group Co mascot is displayed at the company's headquarters in Hangzhou, China, on Sept 28, 2020. (QILAI SHEN/BLOOMBERG)

Ant Group Co will continue to play an important role on Hong Kong’s financial scene even as mainland regulators deepen their scrutiny of the financial technology giant’s business, according to a city official.

READ MORE: Ant IPO suspension sign of stronger fintech oversight

Nelson Chow, chief financial technology officer at Hong Kong Monetary Authority, said the city has no reason to question the presence of Ant, which has a license to run a virtual bank in the city as well as a so-called stored value facility, or SVF, license.

This is one player, but many players are in town as well, so they are competing against each other to offer better services.

Nelson Chow, HKMA chief financial technology officer

“This is one player, but many players are in town as well, so they are competing against each other to offer better services,” Chow said in an interview with Bloomberg Television on Thursday.

Ant was supposed to list in the city and in Shanghai on Thursday, in a US$35 billion initial public offering, that was called off by the Shanghai bourse on Tuesday night.

The suspension of the Shanghai IPO prompted Ant to also freeze the HKSAR leg of the dual listing.

Chinese financial regulators explained that the action was to better protect the interests of financial consumers and investors and sustain sound capital market development in the long run. 

The pulled deal forced the HKMA to reassure markets that there’s ample liquidity in the system. “We have the confidence and ability to maintain the currency and financial stability,” the HKMA said in a statement.

Chow said the event won’t damp the city’s fintech push or appetite among investors. “The tone is very upbeat,” he said. “Investors see Asia and particularly Hong Kong as one of the major places where we’ll see a lot of fintech development.”

ALSO READ: Ant Group investors set to have interest, fees waived

The city this year saw the launch of several virtual banks, including one operated by Ant. The progression of the lenders so far has been “good,” Chow said. They have “very good business models” and can help steer more funding to small and medium sized enterprises through the use of alternative data, he said.

As for granting more licenses, the HKMA will need “some time to observe the existing players,” he said.

Chow said that the HKMA would welcome any decision by the central government to also roll out its new digital currency in the city and “stand ready to cooperate.”

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