(Reuters)-Hong Kong The following are quotes from analysts and lawyers following Alibaba’s (NYSE:BABA) announcement that it would apply for a primary listing in Hong Kong while maintaining its US listing, making it the first major company to take advantage of a rule change in the Asian financial hub.
ASIA PACIFIC CHAIR OF BAKER & McKENZIE CAPITAL MARKETS PRACTICE IVY WONG
“Given recent geopolitical tensions, new listing regimes for technology companies, and cross-border capital market opportunities such as various stock connects, dual listings, and homecoming listings have been on the agenda for many US-listed companies with significant operations in China.
“It allows them to manage any potential regulatory risks while also gaining access to a broader range of investors.”
Nan Li, Finance Professor, Shanghai Jiaotong University:
“Given the increasing uncertainty caused by potential geopolitical conflicts, the COVID-19 pandemic, and changes in financial regulations, it makes sense for Alibaba to get closer to investors in China, who have an information advantage and less ambiguity about Alibaba’s fundamental value.”
KENNY NG, ANALYST, EVERBRIGHT SUN HUNG HAI, HONG KONG:
“If Alibaba is accepted by HKEX for a dual primary listing in Hong Kong, it will imply that the mainland’s supervision of Alibaba may be relaxed, which will boost investor confidence in Alibaba.”
“Chinese companies currently listed in the US face regulatory pressure in the US, and Alibaba’s dual primary listing will help it ease the potential pressure of delisting in the US in the future.”
EXECUTIVE DIRECTOR, DAIWA CAPITAL MARKETS, HONG KONG, JOHN CHOI:
“I wouldn’t jump to the conclusion that this could be a precursor for some ADRs, but I believe it will be a natural progression for many of Hong Kong’s eligible secondary listed stocks to move on and apply for primary listing. This will eventually broaden the investor base and increase the stock’s trading volume. “
CHELSEAY TAM, SENIOR ANALYST, HONG KONG MORNINGSTAR:
“I believe more ADRs will follow suit as it allows them to tap into the mainland (China) investor base while reducing the risks associated with delisting in the US.”
PERISCOPE ANALYTICS AND SMARTKARMA AUCKLAND FOUNDER BRIAN FREITAS:
“The inclusion of Alibaba in Stock Connect will provide mainland investors with access to Alibaba. Given the stock’s name recognition and recent price correction, there is bound to be a lot of interest in the stock.”
