Alibaba surges in HK debut, creating city’s biggest stock 
2019-11-27
CHINESE e-commerce giant Alibaba Group Holding Ltd made a strong debut on the main board of Hong Kong stock exchange yesterday with share price rising 6.6 percent on the first trading day.
The trading day got off to a glitzy start with chief executive officer Daniel Zhang joined on stage at a stock exchange ceremony by Hong Kong’s Financial Secretary Paul Chan and former Hong Kong chief executive Tung Chee-hwa.
Soon after the gong was sounded, Asia’s most valuable company soared almost 8 percent, a bright start after a blockbuster initial public offering that has raised at least US$11 billion, making it the city’s biggest in nearly a decade.
“On the occasion of (Alibaba’s) 20th anniversary, we have ushered in an important milestone, which is to come home, come back to Hong Kong for listing,” Zhang said at the ceremony as crowds clapped and cheered.
Ten customers and partners from eight countries were invited to strike the gong to mark the start of Alibaba’s official trading on Hong Kong Stock Exchange Market, underscoring the globalization of the Alibaba digital economy.
The shares closed at HK$187.6 above the offer price of HK$176, creating the city’s biggest stock with a market value of HK$4 trillion (US$513 billion).
The Hangzhou-based group has issued 500 million shares plus an over-allotment option of 75 million additional new shares to raise up to HK$101.2 billion (US$12.9 billion) through the IPO, the highest since 2010.
Numbers play a key role in the listing. Its stock code is 9988, which translates as “long-standing prosperity.”
Alibaba said it plans to use the net proceeds from share issuance to drive user growth and engagement, empower businesses to facilitate digital transformation and continue to innovate and invest for the long term.
The IPO has made Alibaba the first overseas issuer to raise funds from the Hong Kong market through a secondary listing after the Hong Kong bourse introduced a new framework last year for companies seeking to list in Hong Kong as the second venue.
It has also allowed Alibaba to list with weighted voting rights structures, following smartphone maker Xiaomi and group buying website Meituan Dianping.
Alibaba went public in New York with a world record US$25 billion IPO in 2014 as the Hong Kong bourse at that time excluded the listing of companies with weighted voting rights.
Plans for an Alibaba listing in Hong Kong broke down in 2013, in part because the city’s listing rules prevented founder and then-boss Jack Ma from retaining some control over the board of directors.
Alibaba then wanted an alternative class share structure to give selected minority shareholders extra control over the board, but the Hong Kong bourse declined to change its rules.
Since then, the Hong Kong exchange has tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing Ma to sell shares in the city.
Mainland authorities have also stepped up moves to attract such listings, including launching a new technology board in Shanghai in July.
“We came home. We came back to list in Hong Kong,” Zhang said.
“It helped make up for our regret five years ago.”
Asked whether the firm was planning to sell shares in China’s mainland, Zhang told reporters: “Hong Kong is a new starting point, but certainly not the end.”
