SHANGHAI – The biggest stock market listing of the year took off with a bang on Tuesday when shares of Alibaba jumped 6.59 percent on the first day of trading in Hong Kong, in a symbolic “homecoming” for the e-commerce giant.
At the end of the day’s trading, the share price had jumped to HK$187.6 ($23.9) from the launch price of HK$176.
According to data released by HKEX, the Hong Kong stock exchange operator, Alibaba shares worth HK$ 13.66 billion were traded during the day.
The company, founded by Chinese billionaire Jack Ma, began strongly and continued to rise throughout the day’s trading, which continues for five and a half hours.
This is the e-commerce company’s second listing after it began trading its shares at the New York Stock Exchange in 2014 when it had set a record for the highest Initial Public Offering.
This was also the biggest IPO of the year so far, although Saudi state-owned oil company Aramco is also expected to announce a much-anticipated listing.
According to the Alibaba group, the offer comprises 500 million securities, although international subscribers will be able to exercise an option of over-allocation of another 75 million shares, taking the total value of the operations to HK$101.2 billion.
The shares were offered in lots of 100, and each of the Alibaba shares in New York would be worth eight shares in Hong Kong, as the company had approved launching them in this proportion in July.
The company is listed in the HSCI index instead of the benchmark Hang Seng, as it does not fulfill some requirements such as the structure of its shares, with unequal voting rights.
The Hong Kong listing of Alibaba, founded around 20 years ago in the city of Hangzhou, is being seen as a “homecoming,” and HKEX Executive Director Charles Li Xiaojia emphasized this during the listing ceremony.
Xiajio hailed the listing as a landmark event, and said the company was listed in Hong Kong after a long wait of five years and they saw it as a “family member coming home.”
The listing also comes at a difficult time for the city, which has been witnessing widespread pro-democracy protests and violent clashes between the police and protesters, with no end in sight to the impasse that has affected the economy and share markets in the former British colony.
Alibaba CEO Daniel Zhang praised the city for innovation and changes in the share markets during his speech in the listing ceremony.
Co-founder Joe Tsai said Hong Kong had been the first natural choice of Alibaba for listing but some existing norms and restrictions had forced the company to opt for New York.
Alibaba’s shares began trading under the stock code “9988,” whose pronunciation in Chinese has a sound similar to the phrase “prosperity forever,” a symbolic choice for the company, which was headed until September by Jack Ma, one of the richest people in China.
Similar to the New York launch, the ceremony also included 10 e-sellers and clients along with the directors, who struck the gong along with Zhang.
The CEO thanked consumers and said they had backed the company for 20 years during its “trial and error” progress before a video message from Ma was played on-screen.
The Alibaba listing was the biggest IPO in the Hong Kong market since 2010, and the shares registered the highest first-day jump since 2005, only behind the AIA group (17.1 percent), Bank of China (15.3 percent), the Industrial and Commercial Bank of China (14.7 percent) and China Unicorn (8.9 percent).
The response of the New York market to the launch was yet to be seen after Alibaba shares had closed with a 1.96 percent rise on Monday.