A few days ago, Alibaba (9988) issued an announcement to apply for dual primary listing in Hong Kong and New York.
Alibaba was listed on the New York Stock Exchange in September 2014, and was listed on the Hong Kong Stock Exchange in November 2019.
How will the application for dual primary listing in the two places affect its share price?
What implications does this have for the future development of China Concept Stocks?
Significance of dual primary listings
First of all, the main difference between secondary listing and dual primary listing is that secondary listing refers to a secondary listing in Hong Kong while retaining the primary listing status of US stocks, which takes a short time and enjoys exemptions from many listing rules.
This method used to be the first choice and mainstream for the return of Chinese concept stocks.
A dual main listing is basically the same as a regular IPO. It needs to meet two market regulatory requirements at the same time, which will increase compliance requirements. However, its main listing status is not affected by risks such as forced delisting from overseas listings. At the same time, it also has the opportunity to be included. "Hong Kong Stock Connect".
Alibaba (9988) shares closed at 90.35 yuan today (August 3).
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For many Chinese concept stocks, under normal circumstances, New York is the main listing place. Even if they are also listed in Hong Kong later, the transactions are still depositary receipts (DR), which is called "secondary listing".
Since the US dollar and Hong Kong dollar are freely convertible at a fixed exchange rate, the price difference between the two places is relatively small after the secondary listing, and the Hong Kong stock price actually still fluctuates with the US stock market as the anchor point.
This time Alibaba added Hong Kong as the main listing place, which means that it will no longer be in the form of DR.
The rules to follow will be exactly the same as for an IPO in Hong Kong.
Although the process is more complex and the cost is higher, the two markets are priced independently, reducing risks for companies and investors.
In short, Alibaba will have independent pricing power in the Hong Kong stock market.
Moreover, in the long run, with Alibaba's market value, it will be included in the Hong Kong Stock Connect in the future, which will allow mainland funds to invest in Alibaba more directly...
The dual listing of high-quality companies like Alibaba in Hong Kong will provide a new value anchor for the Hong Kong market and further enhance the international status of the Hong Kong market.
(Visual China)
For details, please read the 328th issue of "Hong Kong 01" Electronic Weekly (August 1, 2022) "
From secondary listing to dual listing, Alibaba leads the general trend of Chinese stocks
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