Shares in Chinese online retail giant Alibaba soared almost eight percent on their Hong Kong debut Tuesday, after raising at least $11 billion in the city’s biggest IPO in nearly a decade.
The much-vaunted start came after a glitzy ceremony at the city’s stock exchange attended by company CEO Daniel Zhang, city Financial Secretary Paul Chan and former Hong Kong chief executive Tung Chee-hwa.
The company drew back the curtains on the trading day and immediately saw its share price rally. It had set the price for each share at HK$176, but it soon jumped 7.67 percent to HK$189.5 in the first few minutes.
Alibaba called the listing a vote of confidence in the city, which has been wracked by months of sometimes violent protests and the China-US trade war, which have sent the local economy into recession.
In a sign of the tensions that still permeate Hong Kong after some of the worst violence of the unrest, riot police were stationed outside the exchange on Tuesday.
Asia’s most valuable company, which is also listed in New York, has said previously it could raise almost $13 billion via the initial public offering, which was originally planned for the summer but was pushed back due to the headwinds hitting the city.
Alibaba’s list price came in below an HK$188 indicative ceiling originally announced.
With 500 million shares offered to investors, the company has said it would raise HK$88 billion ($11 billion). Eight is considered an auspicious number in China. Meanwhile, its stock code is 9988, which is also auspicious in Chinese culture, meaning “longstanding prosperity”.
If it chooses to use its over-allotment option to sell a further 75 million shares, Alibaba could bring in HK$101.2 billion ($12.9 billion).
Even at the low end, the listing would still be Hong Kong’s largest initial public offering since insurance giant AIA raised $20.5 billion in 2010.
Alibaba’s listing in Hong Kong is expected to curry favour with Beijing, which has sought to encourage its current and future big tech firms to list nearer to home after the loss of companies such as Baidu to Wall Street.
Mainland authorities have also stepped up moves to attract such listings, including launching a new technology board in Shanghai in July.
Alibaba’s debut comes after the city’s exchange tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing the firm’s billionaire founder Jack Ma to sell shares in the city.
The company said in the statement that it “plans to use the proceeds from the Global Offering for the implementation of its strategies to drive user growth and engagement, empower businesses to facilitate digital transformation, and continue to innovate and invest for the long term”.
Hong Kong has been seized by months of violent unrest after the government introduced a bill that would have allowed extraditions to China’s opaque judicial system.
It was later withdrawn but the anger it unleashed triggered a wider movement to loosen control by China that brought millions into the streets and saw violent clashes between police and protesters.