Alibaba Invests: China International Capital


Alibaba, the Chinese eCommerce giant, has increased its stake in China International Capital Corp. to close to 12 percent, reported Reuters.

Alibaba purchased 117 million CICC H-shares listed in Hong Kong at an average price of HK$15.50, Reuters reported, citing an exchange disclosure. The total investment was HK$1.81 billion or $230.61 million, the news outlet noted. With the investment, Alibaba is now the second largest shareholder of CICC’s H-shares, with its stake now standing at 11.74 percent. Alibaba rival Tencent is CICC’s largest shareholder with a 12 percent stake, noted the report, citing a separate exchange disclosure.

Alibaba’s investment is the latest in the Chinese giant’s efforts to expand in the FinTech sector, which has been booming as FinTechs partner with traditional financial services companies. With the investments from Alibaba and Tencent CICC gets access to their data and advanced technology as it looks at new growth markets for the company. Alibaba told Reuters in a statement that the increased investment will strengthen a partnership that is long running. Meanwhile, CCIC told the news outlet that it is happy to have long-term investors and plans to work with them to explore FinTech services based on advanced technologies.

At the same time that Alibaba and Tencent are investing in CICC, Singapore sovereign wealth fund GIC reduced its stake in CICC H-shares to 0.87 percent from 7.64 percent. That suggests Alibaba likely purchased the shares from GIC since they sold for the same average price at which Alibaba purchased the shares.

This isn’t the only investment Alibaba is making in the FinTech sector. Its payment affiliate, Ant Financial, inked a $700 million deal to acquire U.K. payments company WorldFirst earlier this month. That marks the biggest overseas transaction for Ant Financial, which has been in expansion mode as well. It is also the first big push by Ant to enter the U.K. market. Alipay, its digital payment service, is accepted at some merchants in the U.K., noted the report.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.