Alibaba Goes Back To Its Roots

Shares of Alibaba rose 2.2% in the U.S. Monday as investors were excited ahead of the secondary listing of the Chinese eCommerce company in Hong Kong on Tuesday. That listing did not disappoint, with shares rising 6.6% on the first day of trade. It is expected that Alibaba raised some $12.9 billion in the secondary listing, making it the largest IPO of 2019.

Needless to say, the listing was considered as pretty successful by analysts, who expect Hong Kong listed shares to continue their appreciation as Chinese investors who were unable to purchase U.S. listed Alibaba shares now move capital into the newly listed Hong Kong shares.

Even if it weren’t for that Alibaba is considered a top-performer in 2019, with its U.S. listed shares up nearly 60% since the start of the year, and closing in on record levels. The company has been successful as an enabler of services in China, such as data storage and the transactions for physical goods, and has even been able to grow its online advertising revenue despite the ongoing trade war that has caused many Chinese companies to become more cautious with their spending.

Alibaba’s listing is also expected to be a huge boost for the Hong Kong market in general, as it helps lift investor confidence in the market that’s been so negatively impacted by the pro-democracy protests going on since June.

One potential concern is that the U.S. listed shares of Alibaba could fall, while Hong Kong listed shares rise, as investors move their capital from the U.S. to Hong Kong.