Heaviest Oversubscription Rate in 4 Years, Alibaba Group Raises $12.9b in IPO
Making the largest share sale in Hong Kong city in nine years and a world record for a cross-border secondary share sale, the e-commerce giant, Alibaba Group has raised up to US$12.9 billion.
Giving confirmation to previous reports, Alibaba said in a statement that it had priced its shares at HK$176 (US$22.49) each, a discount of 2.9 percent to its New York closing price. The pricing stated means Alibaba will raise nearly HK$88 billion (US$11.3 billion), which is a symbolic total as the people associated with Chinese culture relate the number 8 with good fortune and prosperity.
In comparison to the closing price of shares traded in New York, this price is a 2.9 discount. Moreover, its much below the original maximum offer price of $188 Hong Kong dollars.
As per sources, the shares of Alibaba Group are supposed to begin trading on November 26. During the early afternoon trading on the New York Stock exchange, the shares of the Group were $181.97, down 1.77 percent.
After facing violence since a long time in the Hong Kong protests and seeing the country slide into its first recession in a decade, the deal initiated by Alibaba Group will be a major boost to Hong Kong.
Recent updates of the Hong Kong Protests claim that as riot police surrounded the campus of Hong Kong university, students under siege tried to escape using desperate measures. Less than 100 protestors remained in the university. Some of them have abandoned the equipment they used such as gas masks and umbrella.
Even though Alibaba Group has a cash pile of more than $30 billion, analysts claim they were riding the momentum from recent strong earnings, including the earnings on November 11, Singles Day, which was 26 percent more than the previous year.
In the annual marketing event viewed as the world’s busiest online shopping day, Alibaba Group and rival JD.com announced combined sales of $70 billion.
As per Jasper Lawler, Senior Market Analyst at LNG, Alibaba Group can gain huge benefits from this. It will improve the shareholder base of the company during the US-China trade war and can further command higher prices. He added that Alibaba group wanted to be sure that the Hong Kong IPO listing becomes an issue of great interest, so they are “pricing at a level where I’m 100% sure those shares are going to be a lot higher on the day.”
The partial privatisation of Saudi Aramco next month is supposed to be the biggest in the world in 2019. Sources claim that as Aramco goes public on the Riyadh stock exchange, the IPO could raise nearly $26 billion.
In other news, a Chinese payment technology services provider, Yeahka Ltd, announced plans to raise almost $300 million in the Hong Kong listing. Some people aware of the matter who do not wish to be identified say that the company aims to seek a listing hearing as soon as February.
Being the second-largest nonbank independent QR code payment service provider, Yeahka had almost 4.8 million active payment service customers as of June 30.
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