The famous online shopping company and leader in the e-commerce space - Alibaba Group Holding, has filed for a primary listing of its stock in the Hong Kong Stock Exchange (HKEX).
The information was disclosed yesterday by the Chairman and Chief Executive Officer of the Alibaba Group Holding - Daniel Zhang. He revealed that the company has filed to change its primary stock listing to Hong Kong rather than the US. In his words:
"We have received approval from the Board to apply to add Hong Kong as another primary listing venue in the hopes of fostering a wider and more diversified investor base to share in Alibaba's growth and future, especially from Mainland and other markets in Asia."
The decision to transfer its primary stock list to the Hong Kong stock exchange market became necessary from threats of US authorities delisting these Chinese companies from the New York Stock Exchange (NYSE). This was especially so for those wanting to comply with the auditing and disclosure standards in the 'Holding Foreign Companies Accountable Act'. Hence, major Chinese companies operating in the US must obtain a primary listing for their company stocks in the Hong Kong market to consolidate their activities.
Investors seemed to have received this news with great excitement yesterday; hence we saw the Alibaba stock jump by over 3.5% gains after the announcement was disclosed.
The company's stock has been traded in the NYSE and Hong Kong exchange markets. However, the new filing is for the stock to be listed as a significant Mainland stock in the Hong Kong stock market. This will give the Alibaba group a dual listing in the stock markets.
Listing the stock as a primary stock in the Hong Kong exchange market will allow the Alibaba group to be included in the Shenzhen-Hong Kong Stock Connect. Simultaneously, this enables investors in Mainland China easy access to trade the Alibaba stock.
What is the Alibaba Group Known for?
Alibaba Group Holdings is a Chinese multinational technology company specialising in e-commerce, retail, Internet, and technology. The company was established in June 1999 and has advanced to become a leader in online shopping, providing the world's fastest e-commerce platform.
The main objective is to provide a digital marketplace where consumers and traders can assemble to buy and sell from each other with greater trust and confidence for efficient delivery and payments.
Transactions on Alibaba's online sites rose to their highest level last year, with over $248 billion transactions recorded, exceeding those of other popular online companies, including eBay and Amazon. The China market today is dominated by the Alibaba group.
What are the advantages of a dual primary listing in Hong Kong?
By and large, the decision to embark on a primary listing for the Alibaba group as a primary stock in the Hong Kong exchange market has been described by analysts as a significant strategic move. Thus, many believed that listing the stock on the Hong Kong Stock Connect would provide more liquidity for the stock and attract more investors. Mainland Hong Kong has known a unique population of investors. This will be an opportunity for investors to invest in Alibaba stocks easily.
Added to this, listing the Alibaba stock in the Hong Kong stock market will help the company to withstand the current threats by the US authorities on the China stocks listed on the NYSE. This will further assure investors that their investments are secure.
Where can I trade Alibaba stocks today?
Alibaba stocks can be traded as CFD on the ATFX platform. Often trading stocks as CFDs has been considered the best way to maximise profits from investment. This is due to the leverage advantage offered by brokers for trading stocks as CFDs. ATFX is the leading CFD stockbroker in Hong Kong today and is recommended for all Chinese traders seeking to trade the Alibaba stock as CFD.