China has announced new rules on overseas IPOs, potentially sparking the resumption of Chinese companies listing in New York.
Under the new rules, the China Securities Regulatory Commission (CSRC) will vet any overseas listing applications, effective from March 31. The regulator has the power to block such IPOs, and the rules make clear listings must not endanger national security.
Shares of Alibaba Group Holdings are higher following news that co-founder Jack Ma is ceding control of affiliate company Ant Group Co., potentially paving the way to revive plans for an initial public offering by the fintech giant.
Alibaba’s Hong Kong-listed shares
9988,
advanced as much as 8.3% in early trade Monday, widening its year-to-date gains to 27%. Shares are outperforming a 1.7% gain in the city’s broader Hang Seng Index
HSI,
and helping lift the city’s tech index by 3.0%. Alibaba is a shareholder of Ant.
Ant, which owns China’s most widely used digital-payment platform, Alipay, has been overhauling its operations amid a government crackdown that began with Beijing calling off the company’s plans for an IPO in late 2020. The new change of control, announced by Ant over the weekend, moves the company a step closer to restructuring.
Alibaba added Sunday that its equity interest in Ant remains unchanged.
Shares of Alibaba were last up 7.6%. Shares of unit Alibaba Health Information Technology Ltd.
241,
were 8.0% higher.
Hong Kong stocks suffered their worst single session since the 2008 financial crisis after Chinese leader Xi Jinping tightened his grip on power.
The Hang Seng
HSI,
ended more than 6% lower to a new 13-year low, with tech giants including JD.com
9618,
JD,
Baidu
9888,
BIDU,
Tencent
700,
and Alibaba
9988,
BABA,
dropping between 11% and 13% each.
The local Shanghai Composite
SHCOMP,
index fell a less dramatic 2%.
Over the weekend, the 69-year-old Xi secured his third term as general secretary of the Chinese Communist Party. Reporters captured video of former Chinese President Hu Jintao getting escorted out of the closing ceremony. Four of the seven standing committee members were replaced, all of whom are at least 60 years old.
Analysts at Goldman Sachs say most of the new appointees worked with Xi at earlier stages of their careers. “We note that incoming leaders could arguably be more focused on ideological and political subjects while the retiring policymakers appear more economy/market-oriented,” they said.
They added that for valuations to improve, more clarity on the zero COVID policy, stabilization of the property markets, and de-escalation of both cross-straits and U.S.-China tensions would be needed.
China also reported delayed data, saying its economy grew at a 3.9% year-over-year rate in the third quarter, up from 0.4% in the second quarter.