Alibaba Said to Plan Huge New Listing in Hong Kong
Alibaba plans second Hong Kong listing
Large Chinese companies may refuse to place shares in the United States amid trade conflict between Beijing and Washington.
Nearly five years after Alibaba's $ 25 billion IPO fiasco in Hong Kong, Alibaba is considering a secondary listing. Analysts told CNBC other US-based Chinese firms could follow suit.
«I think there will be more companies that want to return to Hong Kong as we do not know what the situation will be on the US stock exchanges», – said Kevin Leung, chief executive of investment strategy at Haitong International Securities.
The United States and China were embroiled in a trade war that led to both countries responding. Technology companies – one of the main problems of the conflict. Washington blacklisted Huawei while Beijing unveiled «list of untrustworthy organizations», which lists foreign companies that are seen as risks for Chinese firms.
ZTE, Huawei's main rival, was forced to temporarily suspend core operations last year after Washington banned the 2018 Chinese telecom giant from buying goods from the US in April..
Experts write that firms with large market caps, stable earnings and market leaders in China may consider placing their shares in Hong Kong..
Alibaba plans to raise US$20b through Hong Kong listing: Reports
Such companies should have at least «one leg on one of the Chinese exchanges», said Gil Luria, director of research at financial services company D.A. Davidson.
Last month, a group of lawmakers introduced a bill that would force US-registered Chinese firms to comply with regulatory controls..
Luria said additional restrictions could be imposed on Chinese firms as the world's two largest economies remain trapped in a trade conflict.
«I would think long and hard if I were a Chinese company already registered in the US or thinking about a US listing», – added Luria.
A Hong Kong or China listing will make it easier for local investors to access shares because they don't have to deal with time differences and capital transfers in the US.