The Hong Kong Stock Exchange has agreed to list shares of Chinese e-commerce company Alibaba, paving the way for investors from mainland China to trade shares directly.
On Monday, the Hong Kong Stock Exchange approved Alibaba's request to convert locally traded shares to a primary listing from the current secondary listing status, according to public filings on the exchange.
The listing note said the listing was expected to become effective by the end of 2022.
Alibaba's presence on the Hong Kong Stock Exchange as a major trading center for its shares will also make it eligible for listing in the Stock Connect program with mainland China.
It is noteworthy that the secondary offering on the Hong Kong Stock Exchange is one of the solutions for rapid listing that does not require many rules, but the stock cannot enter the Stock Connect program, which connects investors in mainland China with the possibility of trading in the stock through a unified system, which is enabled by the offering. The first, which requires more complex terms from companies, was recently facilitated by the Hong Kong Stock Exchange, and has the advantage of allowing a broader investor base and thus higher equity liquidity.
The stock rose briefly by more than 2% in Hong Kong trading on Tuesday morning, before closing up by 1.4% at the end of the session.
We expect the initial transfer to allow us to expand our investor base and facilitate additional liquidity, in particular expanding access to Chinese and other Asian-based investors, Alibaba said in a statement on Monday.
Alibaba listed on the New York Stock Exchange in 2014 in the largest public offering at the time.
Nearly 3 years ago, the Chinese Internet technology giant began attracting investors closer to home with a secondary listing in Hong Kong.
Last month, Alibaba took advantage of recent rule changes in Hong Kong to apply for an initial dual listing there.
Just over a week ago, the US Securities and Exchange Commission added Alibaba to its list of US-listed Chinese companies that face delisting if they cannot meet audit requirements within 3 years. Alibaba said it would work with regulators to maintain its listing in New York and Hong Kong.
