One of China’s most prominent tech companies Alibaba Group recorded strong debut at the Hong Kong stock exchange as its shares rose by almost 7 per cent.
At the end of the first day of trading the stocks of the e-commerce giant closed up at 187.60 Hong Kong dollars ($23.97). As much as $12.9 billion could be raised through the secondary listing of Alibaba which would make it the largest IPO so far this year.
Alibaba has chosen to trade under the stock code 9988 at the Hong Kong exchange because according to Chinese culture, the numbers nine and eight are considered to be lucky numbers which are indicative of long-lasting prosperity.
There has been enthusiasm among investors – both retail and institutional, about the secondary listing of Alibaba’s shares. The IPO has been so popular that it had overperformed which has boosted the position of Hong Kong as the financial gun of Asia despite the city being tormented by pro democracy protests for more than five months now.
The overall turnover of the Hong Kong exchange was boosted as there was changing of hands of 14 billion Hong Kong dollars ($1.8 billion) worth of Alibaba shares on Tuesday.
This listing also gives the chance to Alibaba to impress Beijing in a big way. The company hopes that its Hong Kong listing will be viewed as a sort of homecoming for the company which had first listed its shares publicly in New York despite being one of the crowing jewels of the technology industry of China.
“We have come home,” Alibaba said Tuesday morning on its official account on Weibo, the Chinese equivalent of Twitter. Cartoon representations of animals such as Tmall’s black cat and an Ant Financial’s ant are among the many animal mascots that Alibaba uses to represent its businesses and these were featured in the Weibo announcement by the company.
“Five years ago, we said, if conditions permit, we will for sure return,” said Daniel Zhang, chairman and chief executive officer of Alibaba Group, at Tuesday’s listing ceremony. The previous decision by Alibaba to list its IPO at the New York exchange instead of Hong Kong was taken by it because of the corporate structure of the company was questioned by the city’s exchange.
Thanks to “capital market reform,” Zhang said, “we can make up for the regret five years ago when we missed Hong Kong.”
The stocks of Alibaba inched up 2 per cent at the New York stock exchange in the US following the performance of the stocks in Hong Kong. The IPO launched by the company in 2014 managed to raise as much as $25 billion which is still an all time high and it is expected that the soon to be launched IPO in Saudi Arabia by the kingdom’s oil giant Saudi Aramco could surpass the amount.
(Adapted from CNN.com)