Alibaba Is Listing Itself on the HKEX to Raise $20 Billion in Capital

There has been news that the Chinese tech giant Alibaba Group will be listing itself on the Hong Kong stock exchange to raise capital around $20 billion. This will be the tech giant’s second listing if it goes ahead with the decision. The first one took place back in 2014 and the venue for Alibaba’s market debut was The New York Stock Exchange (NYSE) which broke records. Alibaba Group is China’s Leading Corporation and such a move will bring it closer to its borders.

The board of directors has been in talks with financial advisers and a lot of things are deliberately shrouded in mystery. What has come out, however, is that the company is planning to enlist itself on the Hong Kong Stock Exchange (HKEX) sometime in the second half of this year. The second stock exchange listing will help the company spread and diversify its funding sources as well as enhance liquidity. However, the plans are subject to changes and the minor details cannot be confirmed at the moment.

With its initial listing at the NYSE in 2014, Alibaba was able to raise 25 billion dollars. This was a record breaking moment as Alibaba became the first company in the history to raise that much money on its very first listing.  Regulators in Hong Kong could not be persuaded the last time around to approve a certain governance structure that was proposed by Alibaba. However, the Hong Kong stock exchange has undergone a number of regulatory changes ever since in an attempt to retain its long-held status of being a financial hub in Asia. Sometime around last year, the HKEX gave a go ahead for dual-share classes effectively removing the restriction for Alibaba.

The move is a win-win for both the Hong Kong financial market as well as the Chinese tech giant as both have a lot to gain from such a development. The tense political climate between the US and China has led to a number of Chinese companies to be put on the blacklist by the US. Just this year, another major Chinese firm put off an IPO following the uncertainty in the market in the backdrop of the trade war.

Hong Kong, therefore, will be the perfect venue as it will bring the largest tech company and the vast amounts of investor data virtually within its borders.