Alibaba might pursue $20B Hong Kong listing amid US-China tension

Alibaba is a Chinese multinational conglomerate holding corporation that is specialized in retail, e-commerce, internet, and technology. The company was founded on the 4th of April 1999 by Jack Ma and 17 friends.

Alibaba Group is on the move of raising $20 billion through a Hong Kong listing. This comes about when the U.S. and China have trade tension and by this move, the tension is expected to escalate. This is according to Bloomberg report but the sources remain undisclosed due to privacy issues.

The Chinese Tech company made an entrance on the New York Stock Exchange in the year 2014 September and raised $25 billion. This was perhaps the biggest IPO in history which was greater than the internet giants Google, Facebook and Twitter all combined. Alibaba, a behemoth in e-commerce is on the move to take this path for it to strengthen liquidity and unlock a number of funding sources. This is according to a Bloomberg report.

The second listing by Alibaba is not yet confirmed, however, the Chinese industry is said to have already sought advice from financial advisors with regards to the listings scheduled for late this year. The tension between China and U.S. is considered to give Alibaba the push it needed after a long period in interest in the local listings. The company had previously failed to list in Hong Kong following what the regulators said was a structural problem. Alibaba has a market cap of over $400 billion. The shares have since reduced by 20% over the past years due to several reasons.

This move comes when the U.S.-China trade conflicts are high to a point that they may threaten the thriving of some Chinese industries.  The U.S. through its President, Donald Trump has adopted an antagonistic stand against the Chinese technological companies. This may give rise to a new trend whereby the Chinese listed companies in the U.S. markets may seek second listings on the Asian markets in the midst of trade war fear.

An analyst based in Hong Kong said that the company is not in need of cash however the listing may aid it in improving its access to securing loans from Asian banks. A Honk Kong listing will come up as the 54-year-old founder is about to step down as the company’s chairman in September 2019. Daniel Zhang the CEO of the company is expected to take the helm of the company. Alibaba is also keen on the expansion of some new sectors such as Hema and cloud computing division. These are some of its chain of brick-and-mortar supermarkets aiming for the growth of its e-commerce which is slowly decreasing in value and hence need urgency in their reclamation.

Douyu International Holdings backed by Tencent, China’s biggest live streaming arena for games, had plans to raise $500 million in a United States IPO. Some sources, however, report that the industry has postponed its plans due to the trade war fears. In a tweet, the U.S. President said that the U.S. shall not be on the receiving end in the trade war.

Huawei is the biggest Chinese company experiencing a trade war. This is a multinational tech industry that makes smartphones. Ren Zhengfei, the founder of the company, however, believes that his company will not be blacklisted and promises that the firm will come up with a survival strategy that will ensure its survival. The rift between the U.S. and Huawei began way back. A report by CCN in January said that the scandal could lead to the U.S.-China trade war pressure. A lot of shifts are expected in the two countries as a war of words seems to have begun.


Leave a reply

Please enter your comment!
Please enter your name here