Alibaba, a major Chinese e-commerce company, is making Hong Kong the “primary” listing location for its shares, enabling direct stock trading between mainland Chinese investors.
According to a filing, the Hong Kong Stock Exchange on Monday acknowledged Alibaba’s request to move locally traded shares from their current secondary status to primary listing.
The paper stated that it is anticipated to go into effect by the end of 2022.
Alibaba [NYSE: BABA] would be qualified for inclusion in a stock connect program with mainland China if it attained primary status in Hong Kong.
Tuesday morning in Hong Kong trading, the share price momentarily increased by more than 2%.
In a statement on Monday, Alibaba stated, “We estimate that the Primary Conversion would enable us to extend our investor base and provide incremental liquidity, and in particular, expand access to China- and other Asia-based investors.”
In 2014, Alibaba had the largest IPO at the time by going public on the New York Stock Exchange.
With a secondary listing in Hong Kong, the Chinese internet tech giant started to reach out to investors in their own country over three years ago.
Alibaba applied for a dual main listing in Hong Kong last month, taking advantage of recently changed regulations there.
Alibaba was recently added by the U.S. Securities and Exchange Commission to a list of Chinese businesses with U.S. listings that risk delisting if they fail to complete audit criteria in a timely manner. Alibaba declared that it will cooperate with authorities to keep its Hong Kong and New York stock exchange listings.