Jack Ma's Ant Group faces US headwinds in race to IPO before Trump vote

America is exploring restrictions on Chinese payment services

Jack Ma’s Ant Group has a narrow window to make its much-anticipated market debut ahead of US election turbulence. Now its bankers must grapple with any potential delays stemming from a debate in Washington over restrictions on the payments behemoth.

Discussions over how and whether to restrict Ant — as well as Tencent Holdings Ltd’s payments systems — have accelerated among senior US officials in recent weeks though a decision isn’t imminent, Bloomberg reported.

They come as Ant is expected to raise about $35 billion from simultaneous initial public offerings in Shanghai and Hong Kong as early as this month. China’s biggest payments company already has approval for its mainland listing, but is waiting for a hearing with the Hong Kong stock exchange. That green light would need to come roughly by the middle of October if Ant aims to beat the US presidential vote on November 3.

The Hong Kong hearing before a 28-member panel of external professionals was expected last week but has yet to happen. If it’s delayed much further, the IPO risks straddling the US election where some expect a surge in postal ballots to create a prolonged period of uncertainty. The one-week gap in Hong Kong between the pricing of an IPO and the start of trading means investors would be left exposed to an increase in market volatility. 

“Ant’s business is mostly in China and is self-sufficient,” said Ram Parameswaran, founder of San Francisco-based Octahedron Capital Management, which owns shares in Ant’s affiliate Alibaba Group Holding . and plans to invest in the IPO. “It is highly unlikely that U.S financial institutions will be banned from doing business with Ant.” Ant declined to comment.

Potential options the Trump administration could consider range from a US ban to the far more damaging possibility of putting Ant on a specially desi­gnated national list, which would turn one of China’s crown jewels radioactive for any US company.