Home / Royal Mail / Alibaba dual play is open sesame to China buyers

Alibaba dual play is open sesame to China buyers

The Alibaba Group logo is seen during the company’s 11.11 Singles’ Day global shopping festival at their headquarters in Hangzhou, Zhejiang province, China, November 11, 2020. REUTERS/Aly Song

Register now for FREE unlimited access to Reuters.com

HONG KONG, July 26 (Reuters Breakingviews) – There’s a certain magic to governance tweaks that boost market value by $12 billion instantly. Alibaba’s (9988.HK) Tuesday announcement that it will upgrade its Hong Kong listing to primary status alongside its New York one did just that with an initial 5% bounce. That paves the way for the $273 billion Chinese e-commerce titan to be included in the trading link between Hong Kong and mainland bourses, allowing investors in Shanghai and Shenzhen their first chance to buy shares directly.

The upgrade has been long hoped-for by investors. Bernstein analysts reckons that if 7% of Alibaba is owned by mainland investors, a level similar to Hong Kong-listed rival Tencent (0700.HK), that would involve about $21 billion of inflows.

Alibaba’s move also implies Chinese companies aren’t putting much faith in a resolution of Beijing’s row with Washington over audit inspections. Failure to solve that will see Alibaba and its compatriots forced out of New York in 2024. Less than a quarter of Alibaba’s $4 billion-odd daily trading takes place in Hong Kong now. It’s fair to assume that is only going to rise. (By Jennifer Hughes)

Register now for FREE unlimited access to Reuters.com

Follow @Breakingviews on Twitter

Capital Calls – More concise insights on global finance:

Philips is running out of chances to reassure read more

Arnault insures LVMH against future family feuds read more

Swedish Match results will embolden deal resisters read more

China pulls the plug on $50 bln video-game party read more

Nationalisation better than split for Royal Mail read more

Register now for FREE unlimited access to Reuters.com

Editing by Robyn Mak and Thomas Shum

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.




Source link

About admin

Check Also

Royal Mail threatens more stamp price rises after £120 million Budget hit

Royal Mail’s top brass has signalled potential further stamp price increases following a £120million National …

Leave a Reply

Your email address will not be published. Required fields are marked *