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 Ant Financial Services Group's CSI Taojin Big Data 100 Index is the
first of its kind in the mainland, tracking e-commerce activities to
gauge firms' performance, and marrying the China internet shopping
giant's data troves with its financial services aspirations.
Also on Thursday, the general manager of Ant's finance division,
Yuan Leiming, told Reuters in an interview that online bank MYbank
will be launched in June. It comes after Alibaba's arch-rival
Tencent Holdings Ltd's <0700.HK> own internet bank, WeBank, began
trial operations in January this year.
Alibaba and affiliate Ant have big ambitions for financial services
in China, which have traditionally been geared toward larger and
state-owned businesses and neglected individuals and smaller
enterprises.
For the Ali family, the launch of MYbank and the index are strides
toward building an internet finance platform, which Ant says will
open up services like banking, loans and credit, insurance, payment
systems and investment to new tiers of Chinese society.
Alibaba is China's biggest e-commerce company, while Ant's Alipay
online payment service is the country's most popular. Analysts say
this gives Alibaba and Ant what is possibly China's best data on
consumers' and small businesses' finances.
The companies are now hunting for ways to monetize that data beyond
services like Alipay and Yu'e Bao, a wealth management product for
individuals which since its launch in 2013 rapidly became one of
China's biggest funds.
Expectations are also high for Ant's eventual IPO, after Alibaba
Group's record listing in New York last September. Ant and Alibaba
executives have said the finance arm will likely list in mainland
China, and people familiar with the matter say it is eyeing a 2017
offering.
An Ant Financial spokeswoman said the company does not comment on
its listing timeline nor location.
BIG DATA PROMISE
Ant's new index is composed of 100 stocks in various sectors, it
said in a statement.
The index "weighs industries according to the growth in online
transactions, price levels and the supply-demand situation in
China", making it more timely than depending on quarterly earnings,
said Ant.
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"We're hoping that our index is going to be stronger than the actual
A share market," said Ant's Yuan. The index has grown by about 65
percent since it began its pilot run on Jan. 18, broadly tracking
the A-share market, he said.
Bosera Asset Management, one of Ant's partners in the index venture,
will launch a fund and a note linked to the index, Yuan said. But
Ant is conservative about the fund's future popularity, given that
people still need to witness the value of e-commerce data, and the
index has to gain acceptance, he said.
Analysts see the move as the logical next step in Ant's and
Alibaba's financial ambitions.
"It's very sensible from Alibaba's perspective because they attacked
the money market fund first and have seen huge success," said Howhow
Zhang, director at Shanghai-based Z-Ben Advisors, before the index's
launch. "The next step is index funds."
Shanghai Gildata Services Inc, a unit of Hundsun Technologies Inc
<600570.SS> which is part-owned by Ant, is the third partner in the
index venture.
Ant's and Tencent's online banks are among several recently approved
privately-owned banks, as Beijing looks to shake up its stodgy and
largely state-owned finance industry.
Ant Financial will hold a 30 percent stake in MYbank, which will
have various other shareholders. The bank won regulatory approval
last year.
(Editing by Muralikumar Anantharaman)
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