Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics and Head Fixed Income at ABN Amro, was a guest at BNR Nieuwsradio on 27 October to talk about, among other things, the largest IPO ever, caused by the Chinese giant Ant Group, and the state of affairs among retail investors: Things seem to be going well, but for how much longer?
Chinese superpower
Ant Group, the financial service provider of Alibaba and Alipay, has secured the largest IPO ever. The company will go public with an expected return of more than 29 billion euros: a new record. Can we call this an historic event? Or could we have seen this coming from China? According to Pieterse-Bloem it is actually a combination of two things: The rise of the entire tech sector in China, but also the current Chinese power. ‘China is trying to position itself as a superpower in the field of tech and artificial intelligence. We are now seeing the result of that.’
Political decision
But politics also played a major role in Ant Group's listing on the stock exchange. Due to the current tensions between China and the United States, the company has sought listings in Shanghai and Hong Kong. Despite the tensions, the growth rates of the Chinese company are phenomenal. The total valuation of the company already exceeds 300 billion dollars. It is expected that quite a few new competitors will emerge from China.
Improved situation retail sector
In the second part of the broadcast Pieterse-Bloem talks about the improved situation of the retail investors. We are increasingly going to the offline shop. But for how long will this trend continue? ‘I think it is important to make distinctions across the entire sector. One shopping centre is not the other. The location plays a very important role. You can see, for example, that neighbourhood shopping centres are doing very well, because that is where people go to. Still, I find the current turnover figures very surprising: it seems that if the rules are relaxed, the market recovers very quickly.’
E-commerce winners
‘I also think a lot has also shifted to online,' Pieterse-Bloem says. And of course, the shopping centres do not benefit from this, but online sales have increased enormously. I think that this trend is permanent, and that is also why you see, for example, that in the retail sector, companies with a strong e-commerce platform are the winners.’
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The full item from BNR Nieuwsradio, 27 October 2020, can be found here (in Dutch).