21 December, 2019
In the world’s biggest stock offering this year, Alibaba Group completed its US$13.86bn. secondary listing in Hong Kong in November.
In an issue of 12.5 million new shares, the price rose by more than 6% above the offer price, and immediately created the city’s biggest stock with a market value of HK$4 trillion.
The first day performance was one of the best the Hong Kong Exchanges (HKEX) has seen and placed it as its third largest IPO since 1986.
Alibaba’s listing came in an unusual season for Hong Kong’s economy, which bore with it more meaning than just the record-breaking huge figures. “The listing of Alibaba today is a milestone” said Charles Li Xiaojia, HKEX’s chief executive. The IPO attracted a vast number of applications from retail investors, as well as China’s onshore funds, with mainland institutional investors manifesting their strength. It was in fact Alibaba's decision, back in 2014, to effect its primary listing on the New York Stock Exchange that pushed the HKEX to move away from its previous insistence on one class of listed share and "one share, one vote". Its more flexible approach, allowing dual classes of shares with different voting right for each class, was introduced in the latter half of 2018, but remains reserved for "innovative technology companies".
This secondary listing has been widely seen as a test for the Hong Kong market and for China’s economic power. So far the results seem very positive. HKEX’s more flexible policy for share voting rights and the emergence of the buying power of China’s major investors look to be opening a new world of opportunities.
For further information, please contact:
John Koh, Director, Osborne Clarke
john.koh@osborneclarke.com
