Hong Kong-listed China Financial Leasing Group announced that it will invest $11.14 million into the web3 and AI sectors, including a plan to develop its own crypto platform.
Summary
- China Financial Leasing Group will raise $11M via share issuance to fund AI, web3, and crypto ventures.
- The announcement bumped up its stock nearly 20%, mirroring a wider trend among Hong Kong firms vying for crypto initiatives.
According to an announcement from the Hong Kong Stock Exchange, the Hong Kong-listed China Financial Leasing Group plans to raise funds for its artificial intelligence and crypto ventures through a general mandate by subscribing for new shares. The firm plans to issue approximately 69.379 million shares.
The company aims to raise around HKD 86.724 million ($11.14 million), with net proceeds of about HKD 86.474 million after expenses. While HKD 5 million will be allocated or the firm’s general operating fund, the remaining HKD 81.47 million will be used to invest in the web3 and artificial intelligence sectors.
Not only that, the company’s subscription agreement also revealed that it wants to focus on establishing a digital investment platform within the group. The proceeds from its shares issuance will be used to invest in digital assets, including adding stablecoins and other major cryptocurrencies to its portfolio.
So far, the company has been eyeing several digital asset products for its new venture. According to the notice, China Financial Group’s crypto platform plans to facilitate trading for stablecoins, Bitcoin (BTC), Ethereum (ETH), real-world assets, NFTs, DeFi, DePin and more.
Although the announcement does not mention a specific launch date for the crypto platform, the company’s efforts seem to be set on raising the funds needed to kick-start its web3 initiative, specifically through AI and crypto.
China Financial Leasing Group stock jumps nearly 20%
On Oct. 6, China Financial Leasing Group’s stock received a major boost after its crypto-related announcement went live. According to data from Google Finance, the stock rose by 19.53% or just 0.25 points in the past few hours following the announcement.
Prior to the announcement, the stock flatlined around the $1.20 range, reaching only as much as $1.26. It wasn’t until later, after the announcement went viral, did investors boost the price up to around $1.55 within just a day.
China Financial Leasing Group’s case is not unique. Over the past year, there have been many Asian companies that declared interest in the web3 sector, specifically crypto and AI.
Some companies announced that they would be raising funds from share issuance that will be used to invest in crypto or build a digital asset treasury. Moreover, other Hong Kong companies have taken advantage of the stablecoin wave by expressing interest in registering for a license to launch their own tokens pegged to the local currency
A rise in stock prices would usually accompany such an announcement, providing a much needed boost for its previously weak stock price. For example, Hong Kong’s first licensed crypto exchange OSL saw a rise of more than 12% to its stock in July after it was revealed that the firm would allocate a large chunk of the $300 million fundraising to delve into stablecoins.
The trend of using crypto-related announcements to boost stock prices became so prevalent that the Hong Kong Securities and Futures Commission had to issue a warning to investors. The financial agency asked investors to remain cautious of statements regarding stablecoins and crypto, as it increased alongside the risk of fraud.
Source: https://crypto.news/china-financial-leasing-group-stock-soars-19-after-crypto-announcement/