Alibaba’s US$20 billion Hong Kong listing could take off as soon as in the next few weeks

Chinese ecommerce giant Alibaba could file a formal listing application with the Hong Kong stock exchange as soon as in the next few weeks, people familiar with the matter told Bloomberg.

The offering, as earlier reports have revealed, aim to raise US$20 billion although Alibaba has yet to finalize a fundraising target. The firm is said to have picked China International Capital Corp and Credit Suisse to lead the planned share sale.

The new listing would bring the firm closer to investors in its home country. Earlier reports last month revealed plans from the firm to file for a listing with Hong Kong confidentially from as early as the second half of 2019.

At US$20 billion, the amount would make it the largest share sale in Hong Kong since 2010. In 2010, the Agricultural Bank of China raised US$22.1 billion after it increased its initial public offering (IPO) size in a listing in Shanghai and Hong Kong. In the same year, insurer AIA raised US$17.8 billion in its debut in Hong Kong.

The deal would mark a victory for Hong Kong, after it let Alibaba slip away in 2014 to list in New York due to the dual-class share structure offerings by the New York Stock Exchange (NYSE).

Hong Kong lures Asian tech unicorns

Last year, Hong Kong finally acceded to the dual-class share structure in a bid to prevent Asian tech unicorns from selecting IPO destinations outside of Asia. The decision has proven worthwhile, with two of the hottest tech firms Xiaomi and Meituan Dianping choosing to list with the Cantonese-speaking island with much fanfare.

Alibaba has a whopping market value of US$400 billion and is seen as a prize to Hong Kong. Mr Charles Li, chief executive of Hong Kong Exchanges and Clearing, has repeatedly said that he wants the firm to list in the city.

The efforts to change its listing rules have proven to be effective, as Hong Kong unseated Japan recently as the second-most valuable stock market in Asia, at a market cap of US$5.78 trillion in April, a tad higher than Japan’s US$5.76 trillion, Bloomberg data showed.

China currently remains the biggest equity market in Asia with a market cap of around US$7.6 trillion.

Meanwhile, the trade dispute between the US and China and the increased hostility from the United States (US) government on Chinese tech firms have created market jitters among investors when they consider trading Chinese firms listed on Wall Street.

Alibaba debuted on the NYSE on September 18, 2014, at US$68 per share. The listing was the biggest US IPO in history, larger than US tech firms Google, Facebook, and Twitter combined.