Alibaba Hong Kong shares set to bring in $12.9 billion in secondary listing

China’s largest e-commerce company is expected to price its shares at 176 Hong Kong dollars ($22.50) each, a person familiar with the matter told CNN Business. That’s a roughly 3% discount to Alibaba (BABA) stock’s closing price in New York, where it has traded since 2014.

The price falls short of the 188 Hong Kong dollars Alibaba had set as a ceiling last week, but it will still raise up to $12.9 billion, making it by far the largest public offering of the year.

“Secondary listings are an art form, not an exact science,” said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda.

Alibaba wants to make sure its Hong Kong listing generates a lot of interest, so “they’re pricing at a level where I’m 100% sure those shares are going to be a lot higher on the day,” he added.

The company declined to comment.

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Alibaba stopped taking orders from retail investors a half day earlier than planned, after seeing stronger-than-expected demand for the secondary listing.

The enthusiasm is a vote of confidence in the Asian financial hub, which has been rocked by months of civil unrest. The Hang Seng Index (HSI) fell 4.8% last week as the city grappled with escalating levels of violence. So far this week, the index has gained around 2.2% despite a further escalation in violence centered around the siege of a university.

The company founded by billionaire entrepreneur Jack Ma raised $25 billion in an initial public offering on the New York Stock Exchange that shattered records as the largest IPO in history.

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In the secondary listing, eight Hong Kong shares will be equal to one of Alibaba’s New York-listed shares, the company said in a US regulatory filing last week.

The listing will surpass AB InBev’s (BUD) roughly $5 billion IPO of its Asia business in Hong Kong earlier this year as well as Uber’s (UBER) $8.1 billion debut in New York, the year’s biggest so far. It could also cement the Hong Kong stock exchange’s status as this year’s largest venue for public offerings.
The offering is the latest sign that investors and companies have not been scared away by months of protests in Hong Kong, which recently sank into its first recession in a decade.

Alibaba is scheduled to list shares on November 26.

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