“We’ll encourage (tech platforms) to come out strong in leading economic growth, creating more jobs, and competing globally,” said CCP secretary Guo Shuqing.
Alibaba Group Holding (BABAF) shares surged higher Monday following a move by billionaire Jack Ma to cede control of subsidiary Ant Financial and hints from authorities in Beijing that their crackdown on the tech sector is drawing to a close.
Ant’s $37 billion IPO was scrapped in late 2020 as Ma, its billionaire founder, fell out of favor in Beijing and was summoned by the the People’s Bank of China, to provide “views regarding the health and stability of the financial sector”.
China’s State Administration for Market Regulation then launched its probe into Alibaba amid a broader push to tackle anticompetitive practices in internet commerce, including the alleged pressuring of merchants to list their goods on a single online platform.
Ma’s control of the group, as well as his public persona, faded soon after as authorities began to tighten their grip on what were deemed as excessive profits and outsized influence from some of the country’s biggest tech groups.
Stocks Edge Higher, Inflation, Goldman Sachs, Macy’s, Brazil Riots – Five Things To Know
Guo Shuqing, meanwhile, a Chinese Communist Party secretary of the People’s Bank of China, said Monday that the two-year investigation into ‘ the tech sector will be ‘normalized’ over the coming months, with support provided to those companies prepared to play a bigger role in domestic job creation as the economy attempts to recover from its long Covid-era pullback.
“Next, we’ll promote healthy development of internet platforms,” said Guo. “We’ll encourage them to come out strong in leading economic growth, creating more jobs, and competing globally.”
Alibaba’s U.S.-listed shares were marked 5% higher in pre-market trading to indicate an opening bell price of $112.74 each.
Alibaba posted revenues of around $29 billon for the three months ending in September, the group’s fiscal third quarter, with growth slowing to around 3% on an annualized basis thanks to a pullback in consumer spending liked to the country’s Covid crisis.
The group also declined to publish official ‘Singles’ Day’ sales data in November for the first time, with CEO Daniel Zhang noting that “the resurgence of Covid has affected one area after another, resulting in abnormal or suspended logistic service in different places.”