The significant listing reforms undertaken by the Hong Kong Stock Exchange have finally persuaded Alibaba Group to do secondary listing closer to home, a market it shunned in 2014 when it chose NYSE as a listing venue for its initial offering. Hong Kong lost that mega listing of Alibaba back in 2014 due to the stock exchange’s refusal of the dual-class share structures.
The HK$88 billion (US$11 billion) global offering by the Chinese e-commerce giant received overwhelming response from investors. Alibaba listed on the main board of the city bourse on 26 November 2019, and became the first Chinese internet company listed in both the US and Hong Kong.
It is hoped that the success of Alibaba, which is now Hong Kong’s most valuable stock, may push other US listed Chinese companies to follow suit and make a secondary offering in Hong Kong.
“The Hong Kong regulators have put in a tremendous amount of work over the past six years to bring Alibaba to its home market,” Chris Wong, a Hong Kong-based partner at Simpson Thacher & Bartlett, the legal counsel to Alibaba on US and Hong Kong laws, told China Business Law Journal.
“Alibaba’s listing on the Hong Kong stock exchange is the first listing under the new rules that were introduced in 2018 to attract some of the very best Chinese companies listed in the US to list in Hong Kong. The Alibaba listing has cleared the path for other companies to come to Hong Kong and benefit from full fungibility between the two markets and potential access to a large pool of Chinese capital.”
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