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LONDON – Alibaba, the Chinese e-commerce giant, has postponed its plans to list its shares on the Hong Kong Stock Exchange, according to two people informed about it, while protests continue to shake Asian financial capital.
The protests and instability they created on the Hong Kong stock market led to the postponement of the bid, which was due to take place later this month, they said. This offer was expected to generate between 10 and 15 billion dollars, said one person.
The demonstrations disrupted the city for months and began to disrupt the trade that drives it. Many economists now predict that its economy will shrink in the coming months because of anti-government protests and the worsening trade war between the United States and China.
It is difficult to know when the company plans to organize the stock offering. An Alibaba spokesman declined to comment on the plans, which had already been reported by Reuters.
The Hong Kong business scene is increasingly affected by protesters who are pushing back the Chinese regime. The stock market has fallen about 9% since the end of June, with clashes between protesters and police officers becoming more violent and showing little sign of slowing down.
Beijing has tried to use its economic hold to try to convince the business world to retain its hold on the territory. Last week, the managing director of Cathay Pacific Airways, one of the most successful global brands in Hong Kong, announced that he would resign while the company was under increasing pressure from Chinese regulatory authorities and state-controlled media. Cathay Pacific announced on Wednesday that its planes were less full in July compared to last year, and is expecting an even bigger impact in the coming months.
Qantas, the Australian airline, announced on Thursday that it would reduce the capacity of its flights to Hong Kong.
Chinese state-controlled media has also pressured global accounting firms such as PwC and Deloitte to prevent their employees from participating in protests. Alibaba's decision to postpone its bid does not stem from pressure from the Chinese authorities, according to one of the people informed of the company's plans.
Hong Kong, semi-autonomous region of China, has long been offering access to strong Chinese economic growth while guaranteeing an extremely independent judiciary, wide freedom of expression, one of the highest rates of the world's lowest urban crime and stable political leadership.
These factors have helped make Hong Kong one of the world's favorite places to invest and raise money. Last year, companies listed on the Hong Kong Stock Exchange raised $ 69 billion from investors, according to the local exchange services operator. In addition, last year, measures were taken to ease the registration rules. A decision of the city regulator Allowing the so-called dual-class actions – which give more power to the founders of a technology company than ordinary shareholders – has been seen as a globally positive development for Beijing, which has been vocal in retaining its technology boom closer to home.
According to the details, an Alibaba list would further strengthen this total. Five years ago, the Chinese online trading company became the largest public offering in the world, after raising $ 25 billion on the New York Stock Exchange. Last week, the group released strong, although decelerating, results showing that urbanization and the rise of online retail sales continue to flourish in China, despite the economic slowdown in this region.
The Hong Kong stock offering, which would complement the existing US listing, would have been one of the largest in Asia in recent years. The technology giant was generally expected to raise billions of dollars in new capital.
But the protests that have rocked Hong Kong since June have cast an unexpected veil over the potential supply by putting in place the type of stability that policymakers seek.
The unrest could last well beyond October. The Hong Kong government has shown no sign of complying with the demands of protesters, who want universal suffrage in a political system now dominated by Beijing, the total abandonment of a project of law allowing the extradition of suspects to the mainland and the investigation of tactics used by the police to suppress demonstrations.
Hong Kong has also been affected by the trade war between the United States and China. Due to its relatively open borders with the rest of the world, Hong Kong is a vital vector of trade for many factories in China. More and more economists are predicting that the territory's economy will shrink in the coming months.
Despite all the problems in Hong Kong, Alibaba has a number of reasons to stick to its stock quote plan. A listing in Hong Kong could appeal to Chinese executives, who want to build their stock markets so that these markets lose their reputation for corruption and insider trading and become a reliable way for companies to raise funds.
In the longer term, the Trump administration could take a tougher stance on Chinese companies raising funds in the United States, which could politically complicate Alibaba's listing in New York.
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