Alibaba preparing secondary listing in Hong Kong.
November 19, 2019 Category China News Round-up, Weekly
Alibaba Group Holding, which is already listed on the New York’s Nasdaq for five years, is preparing a secondary listing in Hong Kong that could raise up to USD13.4 billion. The company plans to sell 12.5 million shares reserved for retail investors at no more than HKD188 apiece. The offer puts Alibaba on course to become the biggest float of the year worldwide, dwarfing the IPOs of Uber, Lyft and Pinterest combined. “Hong Kong is one of the world’s most important financial centers. Over the last few years, there have been many encouraging reforms in Hong Kong’s capital market. During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright,” Daniel Zhang, CEO and Chairman of Alibaba, said in a letter to investors.
The mega deal stands as a much needed and well-timed boost for Hong Kong, whose economy and reputation have been dented amid the ongoing waves of violent protests. It also helps the Hong Kong Stock Exchange (HKSE) raise the stakes in its battle with Nasdaq and the New York Stock Exchange (NYSE) as a go-to destination for promising companies, analysts said. The float comes as the e-commerce giant celebrated its 20th anniversary in September and Zhang officially succeeded Jack Ma as Alibaba’s Chairman. “It has what it takes to be the hottest deal of the year,” said Edmond Hui, Chief Executive of Bright Smart Securities in Hong Kong, one of the most active retail brokers in the city’s IPO market. “But the retail demand remains lukewarm, mostly because Alibaba doesn’t sell its shares at a discount.” Hong Kong lost out to New York in 2014 when Alibaba opted for a mega USD25-billion IPO on Wall Street, the China Daily reports.
Pricing is expected to be confirmed on November 20 and share trading on the Hong Kong Stock Exchange is scheduled to begin in the week of November 25. With the fundraising from Alibaba, the HKSE may easily secure a place among the top three in the global IPO league this year, and even retain the much-coveted title as the world’s leading venue for listings for two consecutive years at the last minute. Anheuser-Busch InBev’s USD5.8 billion IPO of its Asian unit and the USD1.6 billion float from ESR Cayman, the largest logistics real estate operator in the Asia-Pacific region, helped revive the sentiment in Asia’s third-largest stock exchange by market capitalization. Alibaba is now one of the largest listed mainland companies with a market value exceeding USD480 billion, up 175% from its IPO price at USD68.
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