Alibaba ready to push the button

Top News | Reuters and Avery Chen 14 Nov 2019

Alibaba is poised to launch a Hong Kong share sale expected to raise up to US$13.4 billion (HK$104.52 billion) as soon as today, according to two sources with knowledge of the discussions.

At that amount, the Chinese e-commerce giant's share sale would be Hong Kong's largest in more than nine years and would rank as the world's largest follow-on share sale targeting an entirely new stock exchange, according to data from Dealogic.

Alibaba had been planning to sell the shares earlier this year but in August postponed the deal as protests became increasingly violent.

A source said Alibaba is confident the company could overcome the negative sentiment in financial markets caused by the demonstrations.

Another source said the timing could slip depending on developments in the protests.

The deal had been initially expected to raise up to US$15 billion, but the source said the company would sell up to 500 million primary shares in the listing.

Including a typical "greenshoe" - overallotment option - to sell some extra shares, the sale could raise up to US$13.4 billion.

Alibaba is planning to price the deal at around HK$167 per share, reports said.

Six local brokers have reserved over HK$66 billion quotas for margin financing.

The overall Hong Kong Interbank Offered Rates rose for the fifth straight day amid tighter liquidity ahead of Alibaba's listing and banks' year-end regulatory checks. The one-month Hibor, which is linked to the mortgage rate, hitting a three-month high at 2.39 percent yesterday.

Meanwhile, shares of three debutants traded mixed yesterday. China Feihe, the largest infant milk formula producer in the mainland, slid 0.8 percent to HK$7.44 on its first trading day, with a market turnover of HK$1.88 billion.

Phone supplier Sprocomm Intelligence surged 24 percent to HK$0.62 with a market turnover of HK$97.4 million as apparel supply chain solutions provider Lever Style fell 27 percent to HK$0.62 with a turnover of HK$48.7 million.

Separately, shares of Home Control International, Singapore-based home control solution provider, fell 11.76 percent to HK$0.90, in the Bright Smart gray market last night.

In other news, Huali University launches its Hong Kong IPO today, aiming to raise up to HK$978 million. The private higher education group is issuing 300 million shares at an indicative price range of HK$2.93 to HK$3.26, with the minimum investment of HK$3,292.85. It's expected to sell shares on November 25.

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