Protests in Hong Kong disrupt Alibaba's $15 billion listing

Chinese Internet giant Alibaba Group has postponed its listing in Hong Kong indefinitely due to ongoing protests, writes WSJ. Overall, Hong Kong's Hang Seng Index has fallen 13% since April.

Details. Alibaba had planned to list in the coming weeks, but sources at the company said today that this will not happen: protests in the region are increasing economic costs.

• The deal was supposed to be very large - from $10 billion to $15 billion.
• The exact timing of the placement by the company has not been set: the management "is in the mode of waiting and monitoring the unstable political situation."
• Alibaba has been trading in New York since 2014 and has a current capitalization of over $456 billion. In June, sources said, the company filed for a listing in Hong Kong. From now on, she has six months to carry out the placement.

Context. The protests and Beijing's response to them are putting a lot of pressure on companies doing business in Hong Kong. Alibaba's IPO delay is just the latest manifestation of this trend.

• Massive protests against the law on extradition to mainland China have been taking place in Hong Kong since June. The organizers of the protests say that up to 430,000 people took to the streets at once. Because of this, Hong Kong's GDP growth slowed to a record low : in the second quarter, the indicator grew by only 0.6%, which is much worse than forecasts (1.6%).
• Due to the unstable political and market conditions, the listing for $10 billion has already been canceled by Anheuser-Busch InBev SA.
• The rallies brought down the Hong Kong stock exchange and the IPO market: Asian IPOs raised $33.3 billion this year. For comparison, IPOs on US exchanges have already raised $201.1 billion since the beginning of the year.

What's next. Alibaba Group may hold an IPO in October if the situation normalizes, but what will happen to the IPO if the crisis continues is not yet clear. The company itself continues to grow rapidly, with Alibaba reporting a 42 percent increase in sales and a doubling of profits for the second quarter of 2019 last week.