Daily Management Review

Alibaba To Launch $20 Billion Second Listing In Hong Kong: Reports


There were jitters across the tech industry of the world following reports originating from the capital markets in Hong Kong where in it is being touted that another round of fund raising of about $20 billion would be done by China’s Alibaba - one of the largest tech companies of the world, through a second public listing in Hong Kong. This report was first published by Bloomberg on Monday citing information from sources with knowledge of the matter.
There have so far been no comments made by Alibaba to the reports beyond it saying that the company does not comment on rumors in the market.
According to the report published by Bloomberg citing sources who did not want to be named because the matter was private, the funds that would be raised by the Alibaba from its second listing in Hong Kong would be put to use by the company to “diversify funding channels and boost liquidity.”
The report further claimed that it would be as early as the second half of the current year that the Chinese e-commerce behemoth would be filing its application for listing in complete confidentiality. It was about five years ago that Alibaba had first gone public with one of the largest initial public offering from any tech company, valued at a record $25 billion, on the New York Stock Exchange after it was refused a public listing by Hong Kong because of controversies that violated rules related to its company structure for public listing.
However in recent years, there is increasing popularity of the Hong Kong Stock Exchange among Chinese tech companies because a listing there puts such companies closer to investors at home according to analysts. This trend has been evident in the last few years. This popularity was further driven by a change of rules at the bourse after it implemented the dual-class tech stock listings last year. Analysts see that change in regulations for public listing that has helped the Hong Kong exchange to attract some of the largest tech companies of China such as the smartphone maker Xiaomi and food delivery service Meituan Dianping.
This news of Alibaba’s Hong Kong listing comes at a time when the ongoing trade war between China and the United States is creating troubles for Chinese companies in America and they are coming under increased hostility there. Earlier in the month, the largest telecom equipment maker and the third largest smartphone maker by shipments in the world was placed in a black list along with its more than 70 affiliate companies in various parts of the world by the Donald Trump administration of the US. This listing in the so called ‘entity list’ of the US Commerce Department effectively prevented the company from doing any business in the US and with American companies in terms of goods or technologies. Huawei and its American business partners now need to obtain license from the US government to continue doing business together anywhere in the world. Huawei’s Chinese rival ZTE has also been put on the list. 

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