China's recent outbound M&A has been suffering with more and more acquisitions failing due to national security concerns, Ant Financial's missed acquisition of MoneyGram being the latest. Why does national security factor into these decisions and why will it remain a crucial consideration in the future?
China is on the verge of creating another uninviting barrier for the cryptocurrency market, however nothing has been set in stone yet. Xinhua, one of the main news outlets in China, released another elusive yet pressing statement on February 5, 2018 laying out some of the government's plans to further hinder Chinese citizens from accessing international cryptocurrency exchanges and ICOs.
On February 1st, Alibaba and Ant Finance jointly announced that, according to their strategic agreement signed in 2014, Alibaba will acquire 33% of Ant Finance’s shares through one of Alibaba’s subsidiaries.
Bitcoin has grown rapidly in 2017 and its grabbed the attention of industry leaders and CEO’s, including Facebook founder Mark Zuckerberg. In January, Zuckerberg released a comment that indicated that Facebook will be looking to research and potentially adapt Blockchain technology.
In China, bar code payments (including QR codes) dominate the mobile payment market. Using a bar code to pay is easy, but comes with risks. In 2017, about RMB 90 million ($14 million) was stolen due to fraud. On December 25th, 2017, the People’s Bank of China (the PBOC) released new regulation to standardize bar code payments. The regulation will come into effect from April 1st, 2018.
XRP has become one of the most hyped cryptocurrencies, outperforming both Bitcoin and Ethereum last year. Much of the hype comes from XRP’s connection to its creator company Ripple Labs, but this link may not be as useful as many hope.
The recent hype around Bitcoin continues to bring uncertainty to the financial stability of countries. Whilst some countries are accepting Bitcoin others are rejecting it and the threats that they perceive it holds.
Evident concern on the volatility and the unforeseeable future of cryptocurrency exchanges have caused the South Korean government to take heightened steps to further inspect new crypto-trading accounts due to an “overheated market” and a number of money-laundering cases. The announcement of this act alone was followed by a downward spiral of 11% in Bitcoin's value.
China has long seemingly been opposed to all things crypto, having previously banned ICO’s and virtual currency trading. However, in the latest development of China’s war on crypto, it is now reportedly set to shut the Bitcoin mining industry.
Previously, WeChat has been the world's dominant chat & payment app with over 1 billion WeChat users worldwide, spread over 15 countries; 200 million of which use the app's payment function. Could WhatsApp's December 2017 release of a payment enabled WhatsApp app in India find similar success?
On December 11th, 2017, China Union Pay (CUP), together with over 30 commercial banks and payment institutions, launched a new version of its mobile payment APP, QuickPass (云闪付), starting a new battle in the mobile payment industry.
China Telecom and China Mobile, two of China's leading telecommunication companies, were approached by the Chinese government under a proposition to enter the Philippines telecommunications market.
With the craze surrounding Bitcoin, many are concerned that the crypotcurrency’s price is over valued and a result of too much hype. However, Blockchain, the technology behind Bitcoin, is captivating the attention of many and is widely regarded as the future of technology. So much so in fact, many countries have already launched or begun looking into the possibility of creating their own Blockchain based, state sponsored cryptocurrencies.
With Bitcoin recently hitting an all- time high of $14,000 USD on December 7th 2017, many have been asking questions about whether the cryptocurrency’s price will continue to rise in the future or if it is simply a speculative bubble waiting to burst. The currency has risen by over $13,000 USD since the 1st of January 2017, a remarkable, and for some unfathomable surge considering it has no tangible assets or value at its core.
Since Chinese online micro lending companies Qudian and Paipai Dai have gone public on the New York Stock Exchange (NYSE), the government has been closely following the development of the micro-credit industry. Scrutiny has fallen not only their business model but also on their high revenue, which specifically caught people’s eyes. The Ningbo Jinzhou Financial Office already shut down two micro lending institutions. On November 21, 2017, the General Office of the State Council issued an urgent notice on suspending approval on the establishment of internet small loan companies. With the arising attention around financial risks, could this be the end of the industry?
Singapore’s PayNow and Thailand’s PromptPay are set to link their national digital payment systems, thereby making it easier to send money between the two countries.
Two weeks after the 19th Communist Party of China (CPC) national congress, the Chinese state council set up the Financial Stability and Development Committee (FSDC), as the institution to ensure the stability of the financial system and provide solutions for future development.
In the venture capital industry, a ‘unicorn’ refers to any technology start-up company which has reached a valuation of over USD $1 billion, as determined by private or public investment. The term was devised by venture capitalist Aileen Lee, founder of CowboyVC, a venture capital fund based in Palo Alto. She discovered that only 0.07% of software start-ups founded in the 2000s would ever reach a $1bn valuation, thereby being as rare as finding a unicorn.
The Securities and Exchange Board of India (SEBI) has introduced a number of measures recently in the capital and commodity markets to improve the quality of market infrastructure and the depth of trading that takes place. We will look at three examples of the recent changes being made by the SEBI here.
It was reported on September 20th 2017 that 17 companies involved in the consumer finance sector had a net profit of 974 million Yuan for the first half of 2017, which was approximately the total net profit for all of 2016. This explosive growth has caused growing concerns amongst regulators who are considering ways to implement a crackdown on the industry.
It is quite obvious that Alipay is the largest mobile payments platform in the world, with approximately 400 million registered users. Third-party payment platforms play an integral role in Chinese consumers’ everyday transactions because of the multi-faceted services offered, such as ecommerce and mobile payment transactions.
According to iResearch data released in September 2014, the Gross Monetary Value of China’s third-party online payments reached 1,840.66 billion Yuan (USD $299 billion), with year on year growth of 64.1%.
The People’s Bank of China (the PBOC) started issuing the Payment Business License since May 2011 to non-banking institutions. Up until March 2015, the PBOC had issued 270 payment licenses.
Qudian lnc, the Chinese micro lending company, has filed for a U.S. IPO at the NYSE earlier last month. It plans to raise up to USD $750 million in capital to spend on strategic acquisitions, marketing and borrower engagement. In only a few years, Qudian has become an eye catching internet lending company with a valuation of over $6.9 billion USD. Qudian’s remarkable success in such a short period of time, shows how profitable the cash loan market can be, as well as the incredible opportunities for transformation that can arise when collaborating with internet giants like Alibaba.
The Financial services sector is integrating AI (artificial intelligence), machine learning and predictive analytics at a remarkable rate for both customer-facing and back-end operations. One element commonly associated with AI, but one that has not yet made a strong impact, are ‘chatbots,’ computer programs designed to simulate conversation with human users. However, this could be about to change, with large financial institutions starting to experiment and launch products leveraging AI technology.
Bitcoin and blockchain technology has raised the specter of dis-intermediation for the leading global banks in the last few years.
The equity market cross-connects between Hong Kong and Shanghai, and Hong Kong and Shenzhen have begun to show signs of growing maturity.
China’s Transsion Holdings, one of the major mobile phone manufacturers in the world and second largest smartphone vendor in Africa is known for owning mobile phone brands TECNO, itel and Infinix. It was the first Chinese smartphone manufacturer to explore the African market and have a smartphone plant in Africa.
Today, its mobile phone brands have experienced tremendous success with itel being the second largest handset vendor in India with approximately 8 million sold handsets within only 8 months of its launch. Whilst, Infinix is successfully winning over the Nigerian and Kenya smartphone market through 'Infinix Mobility' which reported that it sold over 4 million devices in Africa within a 16-month period.
The crypto space is evolving rapidly, from bitcoin in 2009 to over 900 different crypto-currencies in 2017. The space is emerging and developing at an exponential rate. Blockchain technology has been following a similar trend with more and more potential uses being found every day. The potential for innovation is endless, this is only the beginning.
There has been significant news published in the last week regarding regulation around initial coin offerings (ICOs) especially around the Chinese Government's position on ICOs in China. Finally, at 3.00pm, September 4th this Monday, seven important Chinese government departments including the PBOC, issued an announcement to stop any ICO transactions and defined ICOs in China as illegal fund raising. Strict ICO regulatory is the right choice but is this ‘One-size-fits-all Policy’ the right answer?
Ant Financial is well established as the largest fintech in China. These past two years have been excellent for the company as they reached 450 million users with an average expenditure of 16,000 RMB through the Alipay platform. They recently started to make use of Alibaba’s acquired controlling stake of company Lazada in Singapore, which has given them access to most of the SEA market. In addition, Ant bid for Moneygram in the United States, and funded bike sharing service Gobee.bike’s launch in Hong Kong (being the first bike sharing company of the kind launched in HK). However, the important question here is: what awaits the company in the near future? Three words. Diversification, internationalisation and experimentation.
In August this year, WeBank announced that its lending product “Wei Li Dai” (WeChat Loan) has exceeded RMB100 billion (USD14.7 billion).
For several weeks earlier this year, the PBOC (Peoples Bank of China) focused on bitcoin exchanges and halted crypto-currency withdrawals from the main exchanges; now ICO’s (initial coin offerings) have grabbed their attention. With ICO’s growing in popularity they are hard to ignore, In China since the beginning of the year there have been 65 ICO’s, that have raised over 2.6 billion RMB. As such, the PBOC has been considering banning ICO’s as they expose investors to a very high risk and “illegally absorb public funds.”