Alibaba plans Hong Kong’s first paperless IPO
Fears of continuing clashes lie behind decision for full automation of float
Chinese e-commerce giant is planning to have the first paperless stock market listing in the history of the Hong Kong stock exchange. The $13.4bn (£10.47bn, €12.18) initial public offering (IPO) will break with the long-established tradition of investors placing stock orders in bank branches.
The company lodged its 661-page prospectus with the Hong Kong Stock Exchange on Wednesday but reportedly does not want to print a paper copy.
Protests in the semi-autonomous territory broke out this summer following the proposal of a controversial extradition bill but widened in scope to protest against the encroachment of mainland China on ’s independence.
Although most demonstrations have been peaceful, in recent weeks violent unrest has closed shops in the financial district, forcing government schools to close. Such disruption is likely to have motivated Alibaba’s decision to automate fully the retail subscription component of its IPO.
It seems unwilling to have investors queuing in or outside banks while demonstrators and police clash nearby.
Alibaba is expected to issue 500 million new shares and to raise around $13.4bn from the listing, with 12.5 million shares to be issued on Friday.
The Hong Kong stock exchange was the most popular location for public listings in 2018, but the continuing protests are set to see it lose this crown to New York. Some listing were postponed or called off because of the unrest.
The second largest IPO of the year was delayed for months as a direct result of the protests. The brewing giant Anheuser-Busch InBev listed its Asia-Pacific subsidiary in September, raising more than $5bn in the first week and ending with a market value of $48bn (£37.35, €43.62) at the close of the first day of trading.
That listing came during a lull in the unrest, however. Alibaba’s comes in a more tumultuous environment with the Hang Seng index at a five-week low, driven down by poor investor confidence in the stability of the territory.
FURTHER READING: Alibaba's sales jumped 25% to $23bn during Singles' Day
FURTHER READING: Alibaba to go ahead with Hong Kong share sale