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Alibaba’s Hong Kong shares to rise from 6.6% at debut on heavy volume

HONG KONG (Reuters) – Alibaba Group (BABA).(N) (9988.HK) – Hong Kong shares ended their first day of trading up 6.6% from its issue price after this year, and the largest stock available for sale.

Shares having a nominal value of HK$13.99 billion ($1.78 billion), were traded, according to the Refinitiv of the data, which makes it the third-largest debut on record for the Hong Kong market.

Alibaba is already the fifth-most-traded company in New York city this year, with an average of about $2.6 billion a day, Refinitiv of the data turned out to be.

The Chinese e-commerce giant has brought in at least $11.3 billion from the second listing, which was seen as a vote of confidence in Hong Kong’s financial future in the midst of six months of increasingly violent anti-government protests.

The figure could climb to as much as $12.9 billion as Alibaba opts for the exercise of the over-allotment option) within 30 days after the start of trading..

Alibaba shares closed at HK$187.60, was 6.6% higher than the issue price of HK$176 per share.

On Monday, the u.s. American Depository Shares (ADS) closed at $190.45. Eight Hong Kong-shares on a per ADS, which implies a price of$186.30 per share.

Alibaba’s debut comes at the third place in the city for the first day of sales, behind insurer AIA Group (1299.HK) in 2010, which included $HK49.38 billion euros, with China in the Literature, it was second to the $HK14.17 billion when it made its debut in November 2017, Refinitiv of the data turned out to be.

The average daily turnover on the Hong Kong Exchange this year will be $11.6 billion, according to the exchange’s third-quarter earnings report, which means that Alibaba, on Tuesday, for a total of more than one-tenth of the total market turnover.

The yield of the Hong Kong listing will help Alibaba, Asia’s biggest company by market value, and the world’s seventh-largest, to invest in a range of on-line services.

But analysts said it should also take into account that the establishment of a base for investors from Hong Kong and China would be able to function as a back-up of the company, to the shares to be made in New York city, in the middle of the US-China trade dispute.

The Hong Kong and New York shares, which are replaceable, which means that investors buy and sell shares on the exchange, and the rise in prices on the stock markets, are likely to differ too much from each other.

FOR A LONG, LONG TIME TO COME

The premium for New York is reflected in the willingness on the part of investors in the city and in east Asia the stock of a company they are familiar with the market, participants said. Expectations are high that it will get a lift in the rating, if it is eligible for trading in the Stock Connect, which links Shanghai, Shenzhen, Hong Kong, June.

“There will be a few upside-down for the company, and the price is in Hong Kong, but I don’t think we’re in the stocks two or three times a year,” said Geo Securities Chief Executive Francis Lun.

On Tuesday, the listing ceremony, the chief executive, Daniel Zhang has been listed on the Hong Kong debut, it had been a long time coming.

Alibaba wanted to be in the first instance, to list in Hong Kong, but it chose the New York for his record-breaking $25 billion initial public offering in 2014, after an unusual governance structure that has failed to gain acceptance from the Hong Kong authorities.

The loss of the list has been activated for many years of discussion and debate that has resulted in a change in the rules over the last year.

“No, thank you, is Hong Kong, and thanks to all of you, HKEX. Your reform and innovation in the financial markets over the past few years has made it possible for us to realize what we have missed and, five years ago,” Zhang said at the listing ceremony.

Hong Kong has surpassed other major stock selling this year, ranking ahead of Uber Technologies UBER.(N) $8.1 billion IPO and the $5.7 billion IPO for the Anheuser-Busch InBev’s (ABI.BR) Asian located in Hong Kong.

FILE PHOTO: the logo of Alibaba Group is seen at the company’s headquarters in Hangzhou, Zhejiang province, China, on November 18, 2019. REUTERS/Aly Song

In its prospectus, Alibaba said it would use the funds to increase its investment in online delivery and location-based services platform Application.for me, and in one of the online travel group Fliggy.

Alibaba is also planning to spend more on the development of Youku, which is one of the world’s largest online video platforms in China as well.

Retail investors were eager buyers of the deal, you can sign up for up to 40 times the shares they were originally allocated and, ultimately, the take of up to 10% of the deal.

Reporting by Kane Wu, Scott, Murdoch, and Noah’s Sin; editing by Edwina Gibbs and Jason Neely

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