Potential U.S. Limitations Make Case for Alibaba's Hong Kong Listing

(Bloomberg) -- Hong Kong has a new impetus for listing Alibaba Group Holding Ltd. in the city after the White House was said to consider limiting fund flows to China and delisting Chinese firms.

U.S.-listed shares of Chinese companies tumbled on Friday after Bloomberg reported the discussions among Trump administration officials. Alibaba sank 5.2%, while JD.com Inc. lost 6%. A U.S. Treasury official said Saturday there are no plans “at this time” to stop Chinese companies from listing on U.S. exchanges.

Delisting Chinese firms from the U.S. “would have the most serious consequences not just for the ADRs themselves, but for the broader US economy,” Citigroup Inc. analysts including Alicia Yap wrote in a note. Such action could result in Chinese companies with American depository receipts considering dual listings in Hong Kong, they wrote.

A fourth-quarter share sale by the e-commerce giant would offer a strong boost to Hong Kong, which has been roiled in prolonged protests. The city's bourse currently ranks third among global peers in IPOs this year, lagging behind Nasdaq and the New York Stock Exchange, according to data compiled by Bloomberg.

Initial share sales have raised $16.3 billion on the Hong Kong exchange this year, compared with $30 billion for Nasdaq and $28.9 billion for NYSE, data compiled by Bloomberg show. Budweiser Brewing Co., which rose on its debut today, has contributed $5 billion to Hong Kong's tally.

The U.S. has attracted more Chinese technology listings than Hong Kong has done in recent years. Technology and internet firms from China have raised $9.4 billion in U.S. offerings over the last three years, compared with $7.1 billion in Hong Kong.

Alibaba filed for a Hong Kong listing via a confidential exchange application in June, people familiar with the matter said then. The share sale could raise as much as $20 billion. Companies normally aim for a listing within six months of filing an application with the Hong Kong exchange.

UPCOMING LISTINGS:

• Lendlease Global Commercial REIT
  • Singapore exchange
  • Expected listing Oct. 2
  • Size S$740.3m
  • DBS, Citi
• Topsports International Holdings
  • Hong Kong exchange
  • Pricing expected Oct. 2; listing expected Oct. 10
  • Size up to $1.7b
  • Bank of America, Morgan Stanley
  • Asset World
    • Thailand exchange
    • Price: 6 baht
    • Size up to $1.6b
    • Property arm of billionaire Charoen Sirivadhanabhakdi
    • Book building to start Oct. 1; listing expected Oct. 10
    • BofA Merrill Lynch, Morgan Stanley, UBS
    • Lotte REIT
      • Korea stock exchange
      • Size up to 429.9b won
      • Pricing Oct. 7
      • Korea Investment, Nomura, HSBC
      • Home Credit
        • Hong Kong exchange
        • Consumer finance unit of Czech billionaire Petr Kellner's PPF Group
        • Premarketing started Sept. 2
        • Citi, HSBC, Morgan Stanley
        • Bank of Guizhou
          • Hong Kong exchange
          • Size up to $1b
          • ABC International, CCB International, CLSA
          • AllHome
            • Philippines stock exchange
            • Size $285m
            • Expected listing Oct. 10
            • Owned by billionaire Manuel Villar

            More ECM situations we are following:

            • China is set to see the first dual-class listing in the domestic market, as the nation aims to stem an exodus of technology firms seeking listings overseas
            • The Asia-Pacific beer unit of Anheuser-Busch InBev NVgained as much as 4.8% in its Hong Kong trading debut, a positive for the lackluster global market in initial public offerings and vindication for the beermaker in its second attempt at an Asian listing
            • Shenzhen Transsion Holdings, the biggest maker of mobile phones for Africa, soars as much as 96% in debut on China's Star board
            • Hillstone Networks surges as much as 161% in debut on China's Star board
            • Royal Bank of Canada, Banco Santander SA and Japan's Mizuho Financial Group Inc. are among banks that have secured bookrunner roles on Saudi Aramco's IPO
            • FangDD.com, a Chinese online real estate broker backed by FountainVest Partners, is planning to lodge a public filing for its planned U.S. IPO as soon as this week, people with knowledge of the matter said

            SEE ALSO

            • Asia ECM Weekly Agenda
            • IPO data
            • U.S. ECM Watch
            • EU ECM Watch
            • To receive the ECM Watch in your inbox daily, click the “subscribe” button at the top of this article

            To contact the reporter on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

            To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Tom Redmond

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