Alibaba founder Ma says will 'seriously consider' Hong Kong listing

SHANGHAI/HONG KONG (Reuters) – Alibaba Group Holding Ltd (BABA.N) will “seriously consider” listing in Hong Kong, founder Jack Ma said, marking a potential boon for the financial hub which recently decided to move towards allowing dual-class share listings.

Ma made the comments at an event in the city on Monday in response to remarks made by Hong Kong Chief Executive Carrie Lam about how she hoped Alibaba would consider returning to Hong Kong to list, an Alibaba spokeswoman said.

“Daring to speak like this marks a strong commitment so we will definitely seriously consider the Hong Kong market,” Ma said in response to Lam’s speech, according to a transcript provided by Alibaba.

The Alibaba spokeswoman said there were no further details available on what any Hong Kong listing plan could involve.

Alibaba held its record $25 billion public float in New York in 2014 after Hong Kong, its favoured venue, refused to accept its governance structure where a self-selecting group of senior managers control the majority of board appointments.

But Hong Kong is now set to allow dual-class shares under rule changes to be proposed by the city’s stock exchange as it raises the stakes in its battle against New York for blockbuster Chinese initial public offerings (IPOs).

FILE PHOTO: A sign of Alibaba Group is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 3, 2017. REUTERS/Aly Song/File Photo

Hong Kong Exchanges and Clearing (HKEX) (0388.HK), the city’s exchange operator, said in December that it had begun drafting specific rule changes that will be put up for a formal public consultation in the first three months of 2018.

Under the planned rule changes, “innovative” Chinese companies with a market capitalization over HK$10 billion and a primary listing on the New York Stock Exchange, Nasdaq or the London Stock Exchange would be able to seek a secondary listing in Hong Kong. The HKEX has not yet defined what “innovative” is.

“We are also creating a new route to secondary listings in Hong Kong to attract companies from emerging and innovative sectors. We are aware that many successful new economy companies already listed in the US and UK would benefit from these reforms,” wrote Charles Li, chief executive of HKEX, in a blog post last month when the proposed changes were put forward.

Just 3 per cent of Hong Kong listings in the past decade, by market value, have been so-called “new economy” companies, compared with 47 per cent for the New York Stock Exchange, according to a discussion paper published by the HKEX in June.

Hong Kong trading volumes for a household name such as Alibaba would be expected to grow significantly over time, according to bankers.

If more than 55 percent of a secondary listing’s trading took place in Hong Kong over a year, the exchange said in its proposed rules that it would look to upgrade the company’s listing to consider it a dual-listing with its other primary exchange.

Reporting by Brenda Goh in SHANGHAI and Jennifer Hughes in HONG KONG; Additional Reporting by Donny Kwok in HONG KONG; Editing by Himani Sarkar and Muralikumar Anantharaman

Carol Humphreys