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Alibaba Cleared To Sell Stocks And Hong Kong Stock Exchange

Alibaba Cleared To Sell Stocks And Hong Kong Stock Exchange
China’s e-commerce giant Alibaba Group Holding has been granted permission to sell up to HK$117 billion or $15 billion of new shares through a secondary listing in Hong Kong.
This permission to Alibaba, which till now holds the record for the largest initial public offering ever in 2014, is being viewed as a booster for the local financial market and the Hong Kong stock exchange even as the city is being battered by the worst political crisis ever which threatens to dethrone it as a financial hub of Asia and one of the largest financial markets of the world.
Hong Kong has been witnessing pro democracy protests, which sometimes turned violent, for more than 5 months now which has dented its image and economy. Additionally, it is also is dealing with the prolonged US-China trade war. However analysts said that this move by Alibaba is a shot in the arm for the financial market of the city and has catapulted its local stock exchange on a path to claim the top position in the global IPO scenario and almost at the same level as the New York Stock Exchange and Nasdaq.
Alibaba had earlier identified the Hong Kong termed stick exchange as its “natural first choice” and the company, which had a record breaking Single Day shopping bonanza in China a couple of days ago, had been preparing long for this stock sale. The company had chosen the New York Stock Exchange over the Hong Kong stock exchange in 2014 according to reports. This time however Alibaba reportedly wants some of its huge online shopping customers in mainland China and other parts of Asia to own a part of the company.
Its 2014 IPO in the United States raised as much as $25 billion at the New York exchange which is still a record. The deep pocketed capital markets in New York has prompted the company to continue to retain its New York listing, reports said, while at the same time, the company wants to tap into some of the available funds in Asia through its Hong Kong listing. The company will also file its listing plan with the US Securities and Exchange Commission before filing the papers at the Hong Kong exchange.  
Apart from e-commerce, the businesses of the company include big data, financial services, cloud computing and media.
Alibaba’s secondary listing is “a testimony of Hong Kong’s status as a premier listing platform,” said Hong Kong Financial Secretary Paul Chan Mo-po.
“The tension between the US and China in the areas of trade and technology has added to the attractiveness of Hong Kong as an international listing platform for mainland tech companies,” Chan told the media. “We strive to become the preferred listing platform for companies in the innovative and technology sector.”
Reports quoting sources said that the company will fix the price of its shares for Hong Kong on November 20 which also claimed that the since the stocks are so much in demand, therefore the cornerstone investors, which is a phenomena of the Hong Kong’s financial market to invite large investors to anchor important public offerings, will not be present for the Alibaba stock sale.

Christopher J. Mitchell

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