Published: Fri, May 31, 2019
Markets | By Otis Pena

Alibaba to raise Dollars 20 bln in Hong Kong listing in H2

Alibaba to raise Dollars 20 bln in Hong Kong listing in H2

According to reports on Reuters, Chinese e-commerce giant Alibaba is planning a second listing in Hong Kong to raise up to $20 billion.

What happened: Citing unnamed sources, Bloomberg reported that Alibaba is considering a second IPO, this time on Hong Kong's stock exchange.

TechCrunch has reached out to Alibaba for comment and will update the story if ...

The listing is officially meant to diversify Alibaba's funding and boost liquidity, Bloomberg and others reported, citing unnamed sources.

Alibaba's second listing, if it happens, would come at a time when Chinese firms face an increasingly hostile USA government, which has blacklisted several of its leading technology companies.

Hong Kong a year ago amended its rules to make it easier for "innovative companies" listed in NY or London to carry out a secondary listing in Hong Kong, as part of a broader shake up of the city's listing regime.

Mounting concerns over the China-America trade war may also have had to do with Alibaba's decision to add a Hong Kong listing.

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An Alibaba listing would be a catalyst for further tech companies coming to Hong Kong, Morgan Stanley analyst Anil Agarwal wrote in a note on Tuesday.

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. After nearly five years, it has doubled in size with a market value of more than 400 billion USA dollars.

Shares in Hong Kong Exchanges & Clearing Ltd., the operator of the city's bourse, climbed as much as 3.5%.

Alibaba is a Chinese multinational conglomerate holding corporation that is specialized in retail, e-commerce, internet, and technology.

The plan, if it proceeds, would be the sixth-biggest follow-on share sale in history and succeed the firm's $25 billion NY float of 2014.

Alibaba founder Jack Ma said previous year he would "seriously consider" a listing in Hong Kong when it was reported to be preparing to allow dual-class share listings. This year, Chinese games-streaming giant Douyu postponed its IPO launch following market jitters over the trade war. Under new rules for secondary listings introduced previous year, the company can apply for an exemption to standard restrictions in Hong Kong that bar governance models allowing certain key executives to nominate the board. "Alibaba is doing a lot of investments across different sectors and business, so the capital could help".

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