Fri | Oct 15, 2021

Alibaba shares jump in Hong Kong debut

Published:Wednesday | November 27, 2019 | 12:08 AM
A screen shows footage of Alibaba Group co-founder Jack Ma during the Alibaba Group’s listing ceremony at the Hong Kong Stock Exchange in Hong Kong, Tuesday, November 26.
A screen shows footage of Alibaba Group co-founder Jack Ma during the Alibaba Group’s listing ceremony at the Hong Kong Stock Exchange in Hong Kong, Tuesday, November 26.

Chinese e-commerce giant Alibaba’s shares jumped 6.6 per cent in their debut on the Hong Kong stock exchange on Tuesday, an auspicious start at a time when the former British colony is reeling from political unrest.

Alibaba closed at HK$187.60 (US$23.96) per share after trading as high as HK$189.50. Its offering price was HK$176.

The company’s shares already are listed in New York, where its 2014 IPO set a record at US$25 billion.

This offering of 500 million new shares raised more than US$11 billion in Hong Kong’s biggest listing since 2010 – a rare boost for the city after months of political unrest.

Charles Li, executive director and chief executive of Hong Kong Stock Exchanges, praised the company for carrying out the listing.

“I am very thankful that Alibaba, after five years of travelling afar, finally came home. I’m also grateful that they choose to come despite the difficulties, despite the challenges that we are going through here in Hong Kong,” Li said.

The closing price Monday for Alibaba’s New York-traded shares was US$190.45 per share. Each of the US shares is the equivalent of eight Hong Kong shares, which would put the price in Hong Kong terms at HK$186.30 per share.

Alibaba’s 55-year-old founder, Jack Ma, is China’s richest entrepreneur with a net worth of US$39 billion, according to the Hurun Report, which tracks the country’s wealthy. Ma stepped down as chairman in September but is a member of the Alibaba Partnership, a 36-member group with the right to nominate a majority of the company’s board of directors.

The company’s share code, 9988, is a homonym in Chinese for “eternal prosperity”.

It already has a significant cash pile of more than US$30 billion, but is tapping the momentum from recent strong earnings, including the US$38.4 billion it reported in ‘Singles Day’ sales on November 11, up 26 per cent from a year earlier.

If a “greenshoe” over-allotment option is exercised, the proceeds from the offering could be nearly US$13 billion.

AP