The e-commerce giant is taking advantage of the new rule change by the Hong Kong Exchange that permits companies to get a double primary listing.
Alibaba is eyeing a dual primary listing in Hong Kong while keeping its US listing. Currently, the company has shares trading in the US on the New York Stock Exchange (NYSE: BABA) and the Hong Kong Stock Exchange (HKSE). However, the current listing in Hong Kong is a secondary one. Now, the company wants to have primary US and Hong Kong listings.
Alibaba announced its decision for dual primary listing in a press release published on July 25th. According to the company, the board of directors has approved that the management applies for the primary listing in Hong Kong. The process, expected to be completed at the end of the year, will make Alibaba the first large company to have dual primary listings on the NYSE and the HKSE.
Alibaba Eyes Dual Public Listing
The e-commerce giant is taking advantage of the new rule change by the Hong Kong Exchange that permits companies to get a double primary listing. If and when the dual primary listings are successful, Alibaba said it would be on the NYSE in the form of American Depositary Shares (ADSs) and in the form of ordinary shares on the HKSE. Alibaba Chairman and CEO Daniel Zhang spoke on the dual primary listing. He said it would enable a broader and more diversified investor base to share in the company’s growth and future. He added:
“Hong Kong and New York are both major global financial centers, with shared characteristics of openness and diversity. Hong Kong is also the launch pad for Alibaba’s globalization strategy, and we are fully confident in China’s economy and future.”
Non-executive Chairman of Partners Fintech Holdings, Ronald Wan, referred to Alubab’s move as very strategic. In his reason, he said the Hong Kong market had not provided as much liquidity to the company as the US market did. Wan called for Stock Connect to make mainland investors invest in the stocks. Meanwhile, Wealthy Securities Managing Director said being in Stock Connect brings ease to mainland Chinese investors to buy the stock. Louis Tse said, “investors are happy to step in today and buy the stock in Hong Kong.”
In reaction to the news of the dual primary listing, Alibaba stock saw a 6% jump in its Hong Kong listing. At the end of trading on Tuesday, the company’s stock closed 4.82% higher. Also, the online marketplace is currently 4.39% up to $105.50 in pre-market trading on NYSE. The company has grown more than 20% in the last three months.