Alibaba announces Hong Kong primary stock listing, shares up 5%

Alibaba announced a plan to allow more mainland Chinese investors to invest in its shares.

In a statement on Tuesday, the Chinese tech giant said its board had approved a request to upgrade its Hong Kong shares to a primary listing, which it expects to take place by the end of this year.

Alibaba already has a primary listing in the US, where its shares have traded on the New York Stock Exchange since a major IPO in 2014.

The company will maintain its activity there and maintain two primary lists once the move is complete, he said.

Alibaba has had a secondary listing in Hong Kong since 2019, when it joined a string of Chinese companies holding what were seen as Wall Street’s “welcome parades”.

News of the latest public offering sent Alibaba shares up 5% in Hong Kong and in premarket trading in New York.

In the company statement, Chairman and CEO Daniel Zhang said the decision was made “in the hope of fostering a broader and more diversified investor base to share Alibaba’s growth and future, especially in China and other Asian markets.” .

Alibaba has been hit hard since it was caught up in a wide-ranging crackdown by China on the tech sector.

Since then, the company’s shares in New York and Hong Kong have tumbled, losing 49% in value in both markets last year. Its inventories in each city have remained under pressure this year.

The updated listing should help ease some of the tension, according to Stephen Innes, managing partner at SPI Asset Management.

In a report to customers on Tuesday, he noted that “the listing will allow Alibaba to seek inclusion in Stock Connect links with the Shanghai and Shenzhen exchanges,” referring to a program that allows investors in mainland and China to Hong Kong to trade shares across the border.

“This could boost Alibaba’s liquidity after a year-long sell-off triggered by China’s economic slowdown and Beijing’s crackdown on its most potent internet companies,” Innes wrote.

Alibaba has faced more scrutiny since the failed IPO of its fintech affiliate Ant Group in 2020, which would have been the largest in the world.

The e-commerce giant was also fined 18.2 billion yuan ($2.8 billion) last year after regulators accused it of acting as a monopoly.

But investors expect China’s crackdown to end this year after a historic defeat.

In April, Chinese state media reported that the government had pledged to promote the “healthy development” of the tech sector by lifting shares in the country’s tech companies.