Alibaba must find a plan B on the stock market

After the masterful episode of Ant Group’s canceled IPO, its parent company Alibaba is back in the news with a new project. At the crossroads between politics and finance, the Chinese e-commerce giant announced on Tuesday that it would make the stock market Hong Kong a main market. Since 2019, Hong Kong has already hosted Alibaba but has never made it a main marketplace. This change in strategy sends a very strong message about Chinese companies listed in New York.

Indeed, for two years, large Chinese companies have feared for their future on the stock market in the United States. in full trade war, in particular under the mandate of Donald Trump, companies preferred to recover more locally while investors penalized these companies for the sole reason of their nationality. Alibaba will make Hong Kong its main market along with New York, but there is a chance that New York will be pushed aside. At a time when financial markets are gloomy, it was time for Alibaba to make this change.

Investors applaud

Alibaba shares closed up 3.7% in Tuesday’s session. A good sign sent by investors as the title lost more than 45% over one year. The change with the Hong Kong market will not occur before the end of the year in view of its complexity, which is why it will be necessary to measure over several months if Alibaba manages to change the trend of its stock price. He will always weigh the Chinese threat, which leads a very severe policy in the hunt for anti-competitive practices.

The evolution of Alibaba’s share price in 2021 and 2022 © Yahoo Finance

On this point, the country’s economic situation has slightly allowed the leaders to let go of ballast. Thanks to this, Alibaba can carry out a migration of its listing to Hong Kong without too much pressure. As the newspaper pointed out Our timePremier Li Keqiang encouraged technology companies to list in China or abroad. “Hong Kong is also the launching pad for Alibaba’s globalization strategy, and we have full confidence in China’s economy and future.”said Daniel Zhang, CEO of Alibaba.

As for Jack Ma, its founder, nothing indicates that he will be back in public life and at the head of Alibaba. Since September 8, 2019, the Chinese billionaire and businessman has left his business at the time when the government’s guideline was the toughest with Chinese companies deployed around the world. On October 24, 2020 in Shanghai, he was giving one of his most critical speeches about the Chinese government, which certainly got him into trouble today.

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