Alibaba debuts strong in HK

Shanghai Newspaper_ Alibaba debuts strong in HK

Alibaba Group Holding, Ltd. made a strong debut on Hong Kong’s stock exchange yesterday. Chief Daniel Zhang graced the stock exchange ceremony alongside Hongkong’s Financial Secretary Paul Chan and former Hong Kong chief executive Tung Chee Hwa.

A blockbuster initial public offering has raised at least US$11 billion,soaring to almost 8% right off the bat. Its stock code is 9988, translating to long-standing prosperity.

The crowd cheered on as Zhang declared this very important milestone Alibaba took on its 20th anniversary, saying they have come back home to Hong Kong, thru this listing. Exclaiming that this has helped make up for their regret five years ago.

Partners and customers from eight countries were invited to strike the gong to officially start Alibaba’s trading on the Hong Kong Stock Exchange Market. The shares closed at HK$187.6 above the offer price of HK$176, creating the city’s biggest stock with a market value of HK$4 trillion (US$513 billion).

500 million shares plus an over allotment option of 75 million additional new shares were issued by Alibaba, shares raise up to nearly US$13 million through the IPO, the highest that it had since 2010.

The net proceeds from share issuance will be allotted to Alibaba’s plans to drive user growth and engagement. It is also looking into empowering businesses to facilitate digital transformation. In doing so, businesses will continue to innovate and invest on a long-term scale.

Alibaba is the first overseas issuer to raise funds from the Hong Kong market through secondary listing. It is technically a new framework introduced last year for companies seeking to list in Hong Kong as their second venue.

Moreover, it has also enabled Alibaba to list with weighted voting rights structures, following smartphone maker Xiaomi and group buying website Meituan Dianping.

In 2013, Alibaba’s plans for listing in Hong Kong were known. Unfortunately, the city’s listing rules did not allow founder Jack Ma from retaining control over the board of directors. As a result, Alibaba wanted an alternative class share structure to give selected minority shareholders extra control over the board. Again, Hong Kong bourse did not agree to amend its prevailing rules.

In 2014, Alibaba went public in New York with a world record US$25 billion IPO. Around that time, Hong Kong bourse excluded the listing companies with weighted voting rights.

Since then the rules were tweaked to allow double listings while Ma was being persuaded by Chief Executive Carrie Lam to sell shares in the city. In addition, the authorities have worked doubly hard to attract listings by launching a new technology board in Shanghai in July.

Zhang stated that Hong Kong is a new strong starting point and absolutely not the end when asked whether Alibaba is planning to sell shares in China’s mainland.