China’s frenzy of online bank share auctions attracts interest, anxiety
Concerns of pricing, regulation as new billion-dollar market grows
It’s a common refrain in China that you can buy anything on Alibaba’s Taobao online marketplace. As of late 2016 that includes both listed and unlisted bank shares, while experts try to make sense of the new market.
The auction platforms, which also include JD.com, have been allowed to host sales of assets seized by local courts since December 2016 following a Chinese supreme court ruling. But as auctions for bank shares explode, regulatory guidance has yet to catch up.
Beijing Youth Daily reports this week that local court auctions of shares of banks, insurance companies and other debt holding instiutitions on Taobao’s website totaled more than 2 billion yuan (more than US$ 3 million) by December of last year, more than double from a year earlier. The Financial Times said on Sunday that the broader market for the seized assets now totals some US$1 billion.
“From the stock market point of view, there are concerns: transparency is one thing. Pricing and fairness is another one,” Liao Qiang, S&P Global Ratings’ senior director of financial institutions was quoted by the FT as saying.
According to the Beijing Youth Daily report, Taobao’s court auction site has a page for information on the asset appraisal, but lacks any specifics on the method used for pricing shares.
The webiste reportedly includes assets ranging from portfolios of bad debt to Boeing jets and an unfinished skyscraper.