Why Alibaba's Hong Kong IPO May Signal a Chinese Retreat From Wall Street
Clay Chandler here, filling in for Adam from rainy Hong Kong where everybody is buzzing about Alibaba.
As we briefly mentioned on Tuesday, the Chinese tech behemoth is mulling a secondary listing on the Hong Kong exchange to raise $20 billion later this year. The company isn’t commenting.
But in this city, where finance floats nearly everyone’s boat in one way or another, a deal that rich would be cause for jubilation—and a huge coup for Hong Kong Exchanges & Clearing (HKEC), which operates this city’s bourse. In 2014, when Alibaba first sought to go public, Jack Ma and other founders snubbed Hong Kong because HKEC refused to allow dual-class shares granting different voting rights for different stocks. Alibaba listed instead on the New York Stock Exchange, where it raised a record $25 billion. (HKEC has since dropped the dual-class ban.)
And yet Alibaba’s return to Hong Kong also reflects the tempestuous state of U.S.-China relations. As we noted in Data Sheet last week, the escalating trade war between the two nations is morphing into a tech war. Word of Alibaba’s Hong Kong IPO—which comes days after a move by the Trump administration to forbid American firms from selling technology to Huawei Technology—has inspired a new fear: that tensions are spreading to capital markets, too.
The Financial Times warns that Alibaba, after setting the record for world’s richest IPO, “is about to set a new standard for a politically motivated one.”
Alibaba’s New York debut was hailed by many as a milestone in the integration of the U.S. and Chinese economies. In the years that followed, scores of Chinese companies emulated Alibaba’s example, bypassing Hong Kong to raise hundreds of billions of dollars on American exchanges. If Alibaba does float shares in Hong Kong later this year, its IPO could mark the beginning of a Chinese retreat from The Street.
As new big international brands comes out Asia, they will present their IPOs in Asia by passing Wall Street. This wave of protectionism has scared many foreign investors. Bond markets already showing this.
why would Jack Ma wants to pays million of dollars to wall street if they are all against china access to capital market.
Thank the dotard for scaring away more and more giant tech companies from the NY stock market!
"Its IPO could mark the beginning of a Chinese retreat from The Street." Good riddance!
Hope it will retreat from the Wall Street. American exchanges thrives for hundreds of years without Alibaba and it will continue to do so for generations to come.
Lot of Chinese fluent in the English language commenting here.
The Wall Street may already be infected with so much non economic virus and politics that its future is now also threaten . Real economic gurus should intervene to prevent a man from wrecking the institution .
An expensive lesson, all thanks to Trump who revealed the true colours of US at this early stage. Losses to China wouldn't be that much and neither will the economic pain be that long. Never take the easy way out by relying on US tech and dominance. You'll be trapped.
soon China will no 1
Why stay or associate if one is not welcome....
Good for Jack Ma. We only want your money had wear out..... Move out of US, and Australia for that matter....
trump is gaming the Amerikan stock market and getting his rocks off as he has his friends, family and proxies rake in the cash. In your face insider trading by the trump crime family
Does it make trump comfortable?
is it the time that they're prepare to take over the top seat?
USA wall street is regional witout
Amazon back in time was 20 dollars, Alibaba had a good run too, MercadoLibre grew in Latin America, now is your last chance, Jumia is the Alibaba of Africa, little invested money can grow 100 times
We all known no one is trust their accounting system. Good for investors.
Good riddance. China is a major problem that everyone has complained about but REFUSED to confront. Trump is the ONLY one who had the sack to do anything about it!!
We’ve had to listen to ALL of these countries complain for YEARS about their THEFTS yet nobody confronted them.
It is better to get rid of most Chinese companies from Wall Street. They are not trust worthy investments.
Any Chinese business would a fool to have it's assets within reach of the US go nment. Don't be surprised if you see hundreds of billions of dollars own by the Chinese move out of the US and in to Russia. Maybe in the long term this trade war will benefit the US or maybe not but not matter what the outcome there will be significant pain.
Good. Keep your com ism and extreme socialism away from free markets.
king kong jack ma wants his fight in china not usa. usa sucks because of trump the isolationist
USA can buy from Vietnam,Thailand, Cambodia, Laos, Philippine.
all chinese pls retreat back to your cheatna
These trade hawks are full of shxxxt. China is the 2nd largest economy in the world. Their money in our finance market worth billions. This will kill our wall street and the people will suffers.