DiDi’s Plans To Delist From NYSE Send Alibaba, Other Major Chinese Tech Names Sinking In Hong Kong

Benzinga

Contributor:
Benzinga
Visit: Benzinga

By:

Benzinga Staff Writer

Alibaba Group Holding Limited BABA , JD.com Inc JD, Tencent Holdings Ltd TCEHY, Baidu Inc BIDU, and Xpeng Inc XPEV shares traded in the red in Hong Kong.

What’s Moving? 

Jack Ma-founded Alibaba’s shares fell 4.49% to HKD 117.10, while rival JD.com saw its shares decline 6.73% to HKD 319 after DiDi Global Inc DIDI said that its board of directors had authorized the company to initiate procedures to delist the company’s shares from the New York Stock Exchange.

“The Board has also authorized the Company to pursue a listing of its class A ordinary shares on the Main Board of the Hong Kong Stock Exchange,” said DiDi in its statement.

Shares of Chinese electric vehicle manufacturers and tech firms also traded in negative territory at press time. Xpeng plunged 8.4% to HKD 192, Tencent shares were down 2.96% at HKD 459.60, and Baidu dropped 3.46% to HKD 142.20.

The Hang Seng Index traded 0.49% lower at 23,672.60 at press time. On Thursday, the index had closed 0.55% higher. 

Why Is It Moving?  

In July, the Cyberspace Administration of China ordered mobile app stores to remove 25 apps operated by DiDi shortly after the company conducted its U.S. IPO. The Chinese regulator also prohibited the company from onboarding new users. 

This month it was reported that DiDi plans to finalize regulatory penalties by December and relaunch its ride-hailing and other apps in China by the end of 2021.

Meanwhile, Alibaba, which is listed in the U.S. through a variable interest entity, could also face heat as China is looking to ban domestic companies seeking overseas listing through such a mechanism, as per a Bloomberg report. Alibaba went public in Hong Kong in November 2019. 

Chen Weiheng, a partner at Wilson Sonsini told Hong Kong’s South China Morning Post newspaper that the “most sensible route for Didi should be to seek a Hong Kong listing first and then offer the conversion from ADSs to Hong Kong tradeable shares to US shareholders in the US [privatization] and delisting process.”

The head of research at global investment research firm Gavekal, Arthur Kroeber, said that China’s crackdown on internet platforms has created a “climate of uncertainty and fear.” He noted this would have a detrimental effect on the country’s private sector over time, reported South China Morning Post.

Originally Posted on December 3, 2021 – DiDi’s Plans To Delist From NYSE Send Alibaba, Other Major Chinese Tech Names Sinking In Hong Kong

Disclosure: Benzinga

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Benzinga and is being posted with permission from Benzinga. The views expressed in this material are solely those of the author and/or Benzinga and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: OTC Securities

An investment in an OTC security is speculative and involves a high degree of risk. Many OTC securities are relatively illiquid, or “thinly traded,” which tends to increase price volatility. Illiquid securities are often difficult for investors to buy or sell without dramatically affecting the quoted price. In some cases, the liquidation of a position in an OTC security may not be possible within a reasonable period of time.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.