Alibaba eyes sec­ondary share list­ing in Hong Kong

Daily Mirror (Sri Lanka) - - FOREIGN -

(Los An­ge­les) VA­RI­ETY. COM: Alibaba may seek a sec­ondary list­ing of its shares in Hong Kong to raise up to US$20 bil­lion, ac­cord­ing to me­dia re­ports.

The Chi­nese e-com­merce and en­ter­tain­ment gi­ant is cur­rently listed on the New York Stock Exchange, fol­low­ing an IPO in 2014.

Cit­ing anony­mous sources, Bloomberg said the com­pany could file doc­u­ments with the Hong Kong bourse in the sec­ond half of this year. That could mean a share sale late this year or in early 2020.

The tech gi­ant has of­fered no com­ment, say­ing that it does not re­spond to mar­ket ru­mors. How­ever, a sim­i­lar re­port also ap­peared in the Alibaba-owned Hong Kong news­pa­per South China Morn­ing Post. “If Alibaba were to seek a dual stock list­ing, it would be for long-term rea­sons,” rather than be­cause of some­thing tran­sient such as the U.s.china trade war, a source close to the com­pany told Va­ri­ety. “It would more likely be for rea­sons of ex­pand­ing the cap­i­tal base, ex­pand­ing the pool of share­hold­ers to in­clude such in­vestors as can only invest in main­land stocks, and to ex­tend the trad­ing hours.”

A list­ing in Hong Kong would make it pos­si­ble for main­land Chi­nese in­vestors to have easy ac­cess to the shares, as Hong Kong and main­land China op­er­ate a so-called stock-connect scheme per­mit­ting cross-bor­der share-trad­ing. Few Chi­nese, ex­cept pro­fes­sional in­vestors, are cur­rently able to invest in Alibaba’s ADR shares on the NYSE. At the time of Alibaba’s IPO five years ago, Hong Kong stock reg­u­la­tors did not per­mit the list­ing of com­pa­nies with the two-tier share struc­tures com­mon to tech firms built with lit­tle cap­i­tal from the founders, where man­age­ment con­trol is re­tained through a class of pre­ferred shares. Alibaba was seen in Hong Kong as the one that got away, and since then, Hong Kong fi­nan­cial au­thor­i­ties have soft­ened list­ing rules in or­der to at­tract more tech and biotech en­ter­prises. Meituan Dian­ping and elec­tron­ics group Xiaomi have both taken ad­van­tage of the new pol­icy.

Alibaba shares were sold at US$ 68 apiece in Septem­ber 2014. On Fri­day be­fore Mon­day’s Me­mo­rial Day hol­i­day, Alibaba shares closed at US$ 155, giv­ing it a mar­ket cap­i­tal­iza­tion of US$ 402 bil­lion.

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