(Economic Watch) Three questions about Ali's "dual main listing", what can it bring to the Hong Kong capital market?
China News Service, Beijing, July 26 (Reporter Xia Bin) Alibaba (hereinafter referred to as "Ali") is moving towards the Hong Kong capital market in a brand-new way.
Ali announced on the 26th that the board of directors has authorized the management of the group to submit an application to the Hong Kong Stock Exchange, and plans to add Hong Kong as the main listing place.
This means that after the Hong Kong Stock Exchange completes the review process, Alibaba will be dually listed on the main board of the Hong Kong Stock Exchange and the New York Stock Exchange.
In fact, in November 2019, Ali has been "secondary listed" in Hong Kong, and New York is still the main listing place for Ali.
Since then, most of Ali's tradable shares have been transferred to Hong Kong for registration.
According to statistics, for the six months ended June 30, 2022, the average daily trading volume of Alibaba Group's shares in the Hong Kong market was approximately US$700 million, and the average daily trading volume in the US market was approximately US$3.2 billion.
What is the difference between the "dual main listing" in Hong Kong and New York that Ali applied for?
Tian Xuan, deputy dean of the PBC School of Finance, Tsinghua University, pointed out that the biggest advantage of dual primary listing is that the depositary shares listed in the United States and ordinary shares listed in Hong Kong can be converted into each other, and compared with secondary listing, they are not affected by another market. The impact of delisting, the risk hedging effect is significant.
Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center of Zhejiang University International Business School, said that the difference between dual listing and secondary listing is that although both are listed in two places, dual listing is two independent listings, and the two markets are listed separately. Stocks cannot be circulated with each other, and secondary listing is in the form of depositary receipts, and the issued stocks can be circulated and realized between the two places.
"Before, due to the risk of delisting in the US stock market, most companies chose a secondary listing. The purpose is that in the event of a US stock market delisting, US stock investors can achieve stock circulation in Hong Kong stocks. Now the delisting risk is reduced, such as Chinese concept stocks like Alibaba seek to convert secondary listings into dual listings, so that Alibaba Hong Kong stocks gain independent pricing power and are no longer affected by fluctuations in U.S. stocks." Pan Helin said.
What does Ali's move mean for the return of Chinese stocks?
Tian Xuan bluntly said that Ali's dual main listing is a reflection of the return of Chinese stocks, and will also lead more overseas companies to return.
The analysis believes that the dual main listing of companies like Alibaba may form a guiding effect among Chinese concept stocks, and more Chinese concept stocks may make this choice in the future.
According to data from the Hong Kong Stock Exchange, there are currently 9 Chinese concept-stock companies that have dual main listings on US and Hong Kong stocks, including BeiGene, Xiaopeng Motors, and Ideal Motors.
Bilibili has been confirmed by the Hong Kong Stock Exchange and is expected to complete its main listing in Hong Kong in October this year.
In fact, the diversification of the listing of Chinese concept stocks is the general trend.
In recent years, more and more Chinese technology companies have chosen to list in the United States and Hong Kong. On the one hand, it is to deal with the increasingly complex and volatile overseas regulatory environment and risks, and on the other hand, it is also to stay close to the rising tide behind China's stable economic growth. Huge capital, can reach more investors located in China and other parts of Asia.
Tian Xuan said that since 2018, the Hong Kong Stock Exchange has taken a series of measures on the reform of the listing system, and has prepared for the return of Chinese concept stocks, including lowering and relaxing the threshold for secondary listing, and broadening the acceptance of dual main listings. , and made more concise guidelines for companies listed in multiple places to turn Hong Kong into a major listing place after their overseas listing was suspended.
Ali once again seeks to "embrace" Hong Kong stocks, what can it bring to the Hong Kong capital market?
Chen Duan, director of the Digital Economy Integration and Innovation Development Center of the Central University of Finance and Economics, said that for the Hong Kong Stock Exchange, a new economic enterprise of such size as Ali chooses a dual listing in two places instead of a simple secondary listing, which will also form a kind of orientation. effect.
In the future, if more Chinese concept stocks that have been hit by the US capital market choose to return to the dual listing model, it will also have positive value to enhance the pricing power of Hong Kong's capital market in the new economic field and consolidate Hong Kong's strategic position as an international financial center. .
Pan Helin believes that with the dual listing of Chinese concept stocks in Hong Kong, Hong Kong has further consolidated and enhanced its status as an international financial center and increased the attractiveness of Hong Kong stocks to multinational capital. This is mainly due to the huge mainland market. They are the most growing stocks in the global capital market in the past 20 years. They are linked to China's economic dividends and are sought after by global investors.
"Because of this, the listing of these Chinese concept stocks in Hong Kong is not to consume the stock liquidity of Hong Kong stocks, but to provide increments for Hong Kong stocks." (End)