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Market Views

Biggest IPO: World’s biggest Fintech plans to raise $34 billion 

Ant Group has begun the process of a concurrent initial public offering in what could mark one of the biggest IPOs of 2020.

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Biggest IPO: World's biggest Fintech plans to raise $34 billion 

The world’s payment juggernaut, Ant Group, is hoping to raise $34.5 billion in its dual initial public offering (IPO) after setting the price for its shares today, making it the biggest listing of all in modern history, in a report credited to CNBC news.

The Chinese financial powerhouse had earlier disclosed previously that it would divide its stock issuance equally across Chinese major stock exchanges, which include Shanghai and Hong Kong, issuing 1.67 billion new shares at each of those exchanges.

READ: Square buys $50 million worth of Bitcoins

READ: Airtel announces share price today as pre-IPO interest hits $200 million

READ: This report explains why Nigerians are bent on leaving the country

Ant Group’s Shanghai-listed shares will be quoted at 68.8 yuan each. The issuing of 1.67 billion shares would raise 114.94 billion yuan or $17.23 billion.

  • The Hong Kong-listed shares have been priced at 80 Hong Kong dollars each, raising 133.65 billion Hong Kong dollars or $17.24 billion.
  • The listing would produce a return of at least $34.5 billion, as the figure could go higher if the so-called over-allotment option is exercised, depending on demand.
  • It would make it the largest initial public offer of recent memory, putting it ahead of previous record-holder Saudi Aramco, which raised about $29 billion.

READ: MTN may rake in $600 million from Jumia’s planned listing

READ: Jack Ma’s fintech firm is set for IPO, signalling prospects for Nigerian fintechs

Hotflex

READ: Gold futures drops to $1727.80 as America, China tension deepens

What you should know

Ant Group, formerly known as Ant Financial and Alipay, is an affiliate company of the popularly known e-commerce company Alibaba.

  • Ant Group remains the world’s most valuable FinTech company, and most valuable unicorn company, with a target valuation of over US$280 billion.
  • The group owns China’s largest digital payment platform, Alipay, which serves over one billion users and 80 million merchants, with total payment volume (TPV) transaction reaching RMB118 trillion in June 2020.

Explore Data on the Nairametrics Research Website

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Financial Services

PayPal post its strongest Q1, with net profits of $1.10 billion

PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion.

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PayPal acquires shopping browser extension company for $4 billion

The fintech juggernaut posted impressive growth in its revenues in Q1 bolstered by the growing usage of the digital economy. PayPal stated it had revenues of $6.03 billion in Q1 and earnings per share of $1.22, which outperformed market analysts’ forecast of $1.01.

Altogether PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion from $84 million a year earlier.

The company is riding high taking into consideration that online shopping hit a record high spurred by COVID-19, though some market pundits argue that such could change as the pandemic eased. Still, PayPal’s stellar performance does not look likely to succumb to that prediction anytime soon.

READ: Google riding on hot steam, as earnings growth surges by 23%

Highlights of PayPal Q1 earning results

  • Earnings per share: $1.22, adjusted, vs. $1.01 per share expected in a Refinitiv survey of analysts.
  • Revenue: $6.03 billion vs. $5.90 billion expected by Refinitiv.
  • Total payment volume: $285 billion vs. $265 billion expected in a FactSet survey.

“Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” said CEO Dan Schulman in a statement.

READ: iPhone users top 1 billion, Apple posts revenue of $111.4 billion

The company’s impressive performance was also reflected in the addition of 14.5 million new active accounts, with 1.5 million new merchant accounts included, bringing the total merchant accounts to 31 million globally.

“Our record-breaking first quarter results underscore the ongoing strength, diversification, and relevance of our scaled, two-sided, global payments platform. We are raising our FY’21 guidance based on these strong results.” John Rainey the CFO added.

READ: U.S customers can now buy Cryptos with Paypal

Consequently, Paypal has upgraded its service offerings with the option of the ability for splitting up purchases and paying them off for a period of time as well as the ability to purchase and sell, Bitcoin, Ethereum, Litecoin, Bitcoin Cash.

Recent price actions reveal PayPal rose as high as $259.55 in extended New York trading after the announcement was made thereby posting gains of 4.65%.

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Market Views

Economic summary: Crypto, Inflation & SIM Card Policies for the past week

Getting up to an eventful week ahead, these are the things you should know.

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Foreign investors demand for Nigerian stocks increases to N38.98 billion, Nigerians reveal why they pick their favourite banking stocks

Last week was interesting and we tracked some notable events in the economy and markets that would likely have an impact on your money this week.

Economic Indicators

The National Bureau of Statistics released its monthly inflation figures and it is pretty clear that inflation in Nigeria is going only one way — up. Inflation rate stands at 18.17% for the month of March, rising from 17.33% in February. Food inflation currently stands at 22.95%. The macro environment looks particularly gloomy for the average man with rising inflation eroding purchasing power.

READ: Nigeria’s inflation rate rises to 17.33% in February 2021, highest in four years

What we find the most significant is how this will affect investors. With inflation heading towards 20%, it is going to be increasingly difficult for fund managers and investors to earn decent returns on their investments. A few weeks back,  it was stated that the CBN had no real concern with inflation because it was caused by other related factors. We believe it is the right time for the Central Bank to step in by raising interest rates and mopping the excess liquidity in the economy.

The Central Bank last week announced that it was including wheat and sugar on the foreign exchange restriction list. Recall that the CBN had listed 41 items placed on the FX restriction list in 2015, then added maize to the list in 2020.

With existing players like Dangote Sugar, the CBN believes that Nigeria has enough or should have enough capacity to meet local demand.

READ: Biden tax opportunity for Nigeria

Fixed Income

Last week, The Debt Management Office (DMO) announced the offer of N150 billion bonds for subscription by auction in the month of April on behalf of the Federal Government. We reported two weeks ago that bond prices were falling as the yield was rising. As at April, 15th, the S&P FMDQ Nigerian Sovereign Bond Index was -22.07% YTD.

Nigerian investors can still capitalize on decent yields in the bond market. The total subscription received from investors for the bonds was N333.48bn comprising N65.25bn for 16.2884% FGN March 2027 bonds; N110.19bn for 12.5% FGN March 2035 bonds; and N158.04bn for 9.8% FGN July 2045 bonds.

Cryptocurrency and volatility

The cryptocurrency market had a bullish week till yesterday when sell-offs in the market ensured that coins like Ethereum dropped by about 21.46%. Olumide Adesina, a market analyst and cryptocurrency expert, called it a “bloody Sunday.” In a Twitter Spaces conversation with Ugodre Obi-Chukwu on Saturday, he discussed how the market was overheating and the bullish run was unsustainable. Despite the losses yesterday, there is still a lot of upside on cryptocurrencies and many experts remain bullish long-term.

For whoever is willing to invest in this asset class, the rule of thumb is to only invest money you can part with and do your research.

READ: Cryptocurrency: FG should set up presidential commission on cryptocurrency – ACCI

Other related news:

FG lifts suspension of issuance of new sim cards

The FG lifted its ban on new sim cards for telco players last week. This had previously been halted by the Federal Ministry of Communications and Digital Economy last December. Without a doubt, this is good news for stakeholders in the industry as analysts had predicted that the ban would affect the growth of the sector.

From the government’s perspective, it begs the question,  what was the need to issue a ban on new sim cards in the first place?

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