Hundsun Technology stock surged again Wednesday after the company reached an agreement on a joint investment with Shanghai Media Group and Ant Financial Services Group (part of Alibaba) into Hundsun subsidiary Shanghai Gildata Inc, a market data provider similar to Bloomberg L.P. and Thomson Reuters Corp. In total, Hundsun is trading up 130% since Alibaba initially invested.
The investment represents another push by Alibaba into the financial services space and a very crafty one. Financial data in China has been a mixed bag. Local companies still dominate the market as Reuters and Bloomberg are both limited in terms of what they can do in the market. A decade ago, local players all claimed to the be 'dominant provider' of financial data, which largely worked for a period. Historical data from the exchange was spotty and just having a complete set of market data was enough for many of the providers to make money.
The market has gotten serious since then. With QDII and QFII in place and Mutual Market Access just over a week old, the demands for quality data products and services have only increased, and are unlikely to slow as interest in the market grows.
The regulations do seem to be slightly more open to foreign players in the market whether it's by choice or international pressure forcing regulator's hand. Over the past couple of weeks we have seen the market for foreign credit card companies supposedly see the first cracks of light as the market hinted that sometime in mid-2015, foreign players would finally be able to setup clearing services. Could the same thing happen for financial data providers? Potentially, and likely at a good time for them too as international sales for many of the well-known vendors are slowing.
For Alibaba though, it is very interesting. We can already guess their intentions in the banking market with the setup of one of the first private banks. This move into financial data however is an indication that they are getting serious on the capital markets side as well. They really could be pulling together what could be the world's most integrated online financial platform. The only question that remains is whether Tencent or Baidu can get there first.