Alibaba stock on hong kong exchange,Alibaba Group Holding Ltd. operates as a holding company with variable interests in online and mobile commerce through a portfolio of companies. The company’s businesses include consumer-to-consumer (C2C), business-to-consumer (B2C), and cloud computing services. Its platforms include Taobao Marketplace, Tmall, Juhuasuan, 1688.com, AliExpress, Alibaba.com, Aliyun, and Fliggy. The company was founded in 1999 and is headquartered in Hangzhou, China.
Alibaba stock on hong kong exchange
Alibaba Group Holding Ltd. ADR NYSE: BABA $204.00 (0.00%) Volume: 6.03M 7:59 PM EDT, After Hours Official Close 10/19/2020 NYSE $204.00 204.00 $0.00 0.00%
Alibaba Group Holding Ltd (NSESE: BABA) (SEHK: 9988) made a big decision to carry out its IPO in 2014.
At that time, the Hong Kong Stock Exchange did not allow shares of two classes–which effectively ended any prospect of listing Alibaba in the city.
Dual-class shares are a common deconstruction among tech companies because they give founders final control over private shares that carry multiples of the voting rights of common stock.
ACK Ma, founder and CEO of Alibaba, was looking for this when he was looking for a listing goal. Ne Borsa Ork’s purse matches that account.
Alibaba eventually listed its shares in the United States. Alibaba, also known as American Depositary Rec Receipts (ADR), the name of the shares of foreign companies listed in the United States, valued its IPO at $ 68 per share.
Five years later, a listing in Hong Kong followed, as the company sold shares on the Hong Kong Stock Exchange in November 2019 (after a change in weighted voting rights rules).
Now that time
However, given Alibaba’s dominant position and integral role in the Chinese economy, I think it will be good in the long run.
The key question is actually something else: should investors buy Alibaba, which is traded in the United States or Hong Kong?
Better liquidity in the US
A big problem for investors is the liquidity (or daily turnover) of a stock in the market. If it is a department store like Alibaba, investors can trade larger quantities at a better price than if sales are lower.
This is because lower sales mean that a stock’s price movement is not as active, which results in a vicious cycle where lower sales can often cause a stock to trade sideways in the long run (i.e. remain static).
For Alibaba, ADRs in the US offer better liquidity to investors, especially since most of the public shares are held there.
Only 22% of Alibaba’s publicly traded shares are traded through Hong Kong, while the rest are traded in NE.
However, this percentage is in a long-term upward trend, and there is a fundamental reason for this.
Political tension between China and the United States Dec
One risk that did not arise when Alibaba traded in the United States in 2014 was the danger of geopolitical tensions.
In recent years, a more aggressive trade policy towards China has definitely increased due to the start of the U.S.-China trade war and U.S. government sanctions against Chinese companies.
These tensions will not disappear even with future US President Biden. The realization that China is now a strategic threat (and no longer a partner) is one of the few issues on which the two US political parties can agree.
What is the outcome for investors? For those who are paying attention to the sharp escalation of tensions, it certainly makes sense to hoard Hong Kong shares.
Features of Hong kong Addition and Stock Connect
An important advantage of Alibaba’s Hong Kong shares, which is less discussed, is that they are now included in both the Hang Seng Index and the relatively new Hang Seng tech index.
Given that it’s such a big stock on the Hong Kong Stock Exchange (and even though it’s been reported recently), it’s only a matter of time before Alibaba joins Hong Kong Stock Connect.
This is the program that allows investors in mainland China to buy important shares listed on the Hong Kong Stock Exchange.
In this way, investors in mainland China who do not have access to Alibaba’S ADRs due to capital outflow restrictions can invest in a piece of one of China’s leading tech companies. Undoubtedly, this will be done through its Hong Kong-listed shares.
Alibaba stock on hong kong exchange
One thing investors should consider is that if they want, they can only buy a share of Alibaba in NEOR
However, in Hong Kong, a lot for Alibaba is 100 shares due to the “lot” system of stock trading, which means that the minimum amount needed to invest is HK$22,300 (US $ 2,875).
Where Are Alibaba’s shares?
Although Alibaba’S US ADRs offer better liquidity to investors and the monetary barrier to acquisition is lower, the inevitable long-term trend is for Hong Kong stocks to gain influence as investors move from the US to Hong Kong.
The possibility that investors in mainland China also own a piece of Alibaba bodes well for its shares in Hong Kong in the long run (as the city is a natural home for Chinese IPOs).
Long-term share ownership is still a relatively new concept in China, and as investors become more familiar with long-term acquisition and maintaining quality assets, Alibaba will be one of the main beneficiaries.
Disclaimer: Tim Phillips, president of ProsperUs content, Alibaba Group Holding Ltd. he owns his shares.