Global e-commerce company, Alibaba Group Holding Ltd, is delaying its $15 billion listing on the Hong Kong Stock Exchange due to pro-democracy protests in the country.
A report by Reutersstates that the listing could, however, be relaunched as early as October should the tensions in the country ease up and the market look better. Earlier plans had the IPO slated for August but pro-democracy protests have been ongoing in the country for about 11 weeks since June 9.
The tense protests are said to have been in opposition to the extradition bill proposed by the government. So far, the tension has shown little signs of coming to an end. This has in turn affected the market as Hong Kong’s benchmark Hang Seng index fell to a seven-month low last week.
Launching an IPO in such unstable market conditions would prove to be unwise, hence the decision of the board to delay the listing till the market becomes more favorable, according to sources in the know.
The deal which is expected to be the largest share sales this year and is one of the largest follow-on share sale in seven years, is said to be a big deal for the Hong Kong market – the 3rd largest stock exchange in Asia. It will help the HKSE test itself as against rivals like the New York Stock Exchange, where Alibaba happens to also be listed, as one of the leading global listings venue.
Last month, Anheuser-Busch InBev canceled a planned up to $9.8 billion Hong Kong IPO of its Asia Pacific unit.
Experts also say that the delay is a blessing for other listed rival Chinese tech companies such as Tencent Holdings. This is because interested Alibaba investors would still hold off withdrawing their capital from these companies.
The city loosened its rules last year specifically to lure overseas-listed Chinese tech giants to list closer to home.
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