Business

Alibaba Enhances Hong Kong Listing to Draw Mainland Investors

Aug 23, 2024 1 min read

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Alibaba Group Holding Ltd. has received shareholder approval to upgrade its Hong Kong listing to primary status, effective August 28, 2024. This strategic move will enable the company to join the Stock Connect program, linking the Hong Kong Stock Exchange with mainland China's bourses in Shanghai and Shenzhen. As a result, Alibaba's shares will become accessible to the 220 million investors on mainland China's stock market, potentially bringing in up to $19.5 billion in investments within the first six months of inclusion.

The upgrade to a dual primary listing on both the Hong Kong and New York stock exchanges does not involve the issuance of new shares or additional financing. This change aims to boost Alibaba's trading volume and liquidity, which have been under pressure due to a significant drop in the company's stock value since October 2020. The inclusion in the Stock Connect program is anticipated to provide substantial capital inflow and increased investor confidence.

This move comes at a critical time for Alibaba, as the company faces competitive pressures and a sluggish consumer market in China. The company's recent financial results showed a 4% year-on-year increase in revenue but a 27% decline in profit, highlighting the challenges it faces. Additionally, Alibaba has been actively investing in artificial intelligence startups, alongside Tencent Holdings, as part of its broader strategy to diversify and innovate within the tech industry.

#finance #markets #tech #world

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