In recent years, China’s control over Hong Kong has been increasing, but the city state is still different from mainland China in many ways. The city is legally part of China, but operates according to different institutions. China officially maintains a “one country, two systems” policy toward Hong Kong. Stock Connect is a program that links the mainland Chinese and Hong Kong Stock markets.Īccording to Goldman Sachs ( GS), these markets were historically separate. With Stock Connect inclusion, that could change, serving as a major catalyst that triggers buying, taking BABA to new heights. Today, it’s not easy for those billion customers to invest in BABA stock. Alibaba has 1.3 billion customers, including a billion in China and 300 million elsewhere. If it gains access to Stock Connect, then Alibaba will be easily available for Chinese investors to buy.īecause the majority of Alibaba’s customers are in mainland China. Currently, if you check the ticker lookup tool on Stock Connect, you’ll see that Alibaba isn’t among the shares eligible for the program. It’s already dual-listed, but the primary listing in Hong Kong will enable its shares to trade on Stock Connect, a service that lets mainland Chinese people invest in Hong Kong. This month, BABA received approval for dual primary listing. One catalyst, however, might be coming soon:Īlibaba gaining dual listing status on the Hong Kong Stock Exchange. China recently cut lending rates, which moved the Hang Seng Index (including BABA) on Thursday, but there hasn’t been much heard about Alibaba individually. Apart from that, we just haven’t heard a whole lot. The last truly big story was the fiscal Q1 earnings release, which beat expectations, but not enough to get the stock moving. One problem with Alibaba is that there haven’t been many positive catalysts for the stock. That may have been due to the SoftBank sale occurring around the same time. Alibaba’s most recent quarterly earnings beat estimates by 13%, but the subsequent rally (about 2%) was pretty mild. The most damaging report was news that SoftBank ( OTCPK:SFTBY ) would sell part of its BABA stake, a large position (around 9% of the float) that hadn’t moved in decades. Later, though, it got hit with a series of negative news stories and fell back to $90. After bottoming at $72 back in March, it quickly regained much of its lost ground, eventually hitting a high of $120. Alibaba Group Holding ( NYSE: BABA) stock hasn’t been moving much lately.
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