Hong Kong-traded stocks surged today (29) after Alibaba announced it would split into six major companies.
(Bloomberg file photo)
[Financial Channel/Comprehensive Report] Alibaba (Alibaba) announced yesterday (28th) that it will split its business into six major companies. Stocks traded in Hong Kong surged 15% at the opening today (29).
According to comprehensive foreign media reports, Alibaba is expected to be split into six companies, namely Cloud Smart Business Group, Taobao Tmall Commercial Business Group, Local Service Business Group, Cainiao Smart Logistics Business Group, Global Digital Commerce Business Group and Digital Media The entertainment business group, each of which will be managed by its own CEO and board of directors, will also raise funds or pursue an initial public offering (IPO) in the future.
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This news pushed Alibaba’s ADR up 14.3% on Tuesday. Today’s Hong Kong stock market opened, and Alibaba rose 15%. The intraday increase once reached 16.3%, reaching a peak of 98 Hong Kong dollars. As of the lunch break, it rose 13.2% to 95.35 Hong Kong dollars.
Jon Withaar, head of Asia special situations at Pictet Asset Management, said Alibaba's reforms felt like a continuation of the government's restructuring of tech companies and the unraveling of China's big monopolies.
It could be a sign that regulatory scrutiny is drawing to a close, after which it could be expected to regain favor from regulators and policymakers, Wiesel said.
Beijing's unprecedented regulatory crackdown on the internet, private education and real estate sectors has wiped billions of dollars off market value and dampened investor sentiment over the past few years.
Alibaba has also faced continuous growth difficulties in the past few quarters, and the company's market value has shrunk by about US$600 billion (about NT$18.2 trillion) from its high point in October 2020.
As of the lunch break, the Hang Seng Index of Hong Kong stocks rose 1.9%, the Hang Seng Technology Index rose 2.7%, and other large technology stocks also rose simultaneously. JD.com rose 2.6%, and the increase reached 7% in early trading; Tencent rose 2.1%, the largest increase was 5%.
KraneShares Chief Information Officer Brendan Ahern said the reaction from investors showed that Alibaba's plans could be copied by other giants in the future.
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