Alibaba Group Holding Limited (NYSE:BABA) reportedly plans a second listing in Hong Kong

Alibaba Group Holding Limited (NYSE:BABA) reportedly plans a second listing in Hong Kong

Alibaba Group Holding Limited (NYSE:BABA) reportedly plans a second listing in Hong Kong

For years, many large Chinese companies have chosen to list in the U.S. instead of Hong Kong or China. Now, amid a trade dispute between Beijing and Washington, one national champion may lead the way back home.

Nearly five years after Alibaba shattered records with a $25 billion IPO, the company is said to be planning a secondary listing in Hong Kong. Analysts told CNBC that other U.S.-listed Chinese firms may consider doing the same.

“I think there will be more … companies looking to move back to Hong Kong because we really don’t know what the U.S. will be doing,” said Kevin Leung, executive director of investment strategy at Haitong International Securities.

The U.S. and China have been engaged in a trade war that has seen retaliatory moves from both countries. Technology is one of the thorny issues at the center of the dispute. Washington has placed Huawei on a blacklist, while Beijing introduced an “unreliable entities list” — which identifies foreign companies deemed as a risk to Chinese firms.

“From what we see from Huawei and ZTE before, (the) U.S. definitely seems to have issues with China and tech advancement,” he said. ZTE, a major rival to Huawei, was forced to temporarily suspend major operations last year after Washington banned the Chinese telco giant 2018 from buying goods from the U.S. in April.

US vs Asia listings

But not all analysts agreed.

Dickie Wong, executive director of research at Kingston Securities brushed off concerns about increased scrutiny in the U.S. He said America is “open minded” about listings, and firms that comply with regulations and doing legal things should have “no problem at all.”

While regulations in Hong Kong and China have improved, market conditions may not be supportive of secondary listings by any company, Wong added.

He cited as an example the scrapped public listing for Budweiser Brewing Company APAC — which is Anheuser-Busch InBev’s Asia-Pacific business unit.

It was initially set to raise up to $9.8 billion and would have been 2019′s largest IPO. The company had planned to list on the Hong Kong Stock Exchange on July 19, but finally chose not to proceed, citing “several factors, including the prevailing market conditions.”

“That’s definitely a very bad thing for … the IPO market, for Hong Kong Stock Exchange,” said Wong. “It’s a negative sign of the outlook of the Hong Kong stock market itself.”

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 169.11.

The projected upper bound is: 186.20.

The projected lower bound is: 168.48.

The projected closing price is: 177.34.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 88.2774. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 62.03. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 36 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 103.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 14 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 6 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -1.380 at 177.290. Volume was 14% below average (neutral) and Bollinger Bands were 34% narrower than normal.

Open     High      Low     Close     Volume___
178.660 179.120 175.380 177.290 3,174,269
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 174.54 165.42 163.83
Volatility: 22 34 43
Volume: 3,373,541 4,277,923 3,891,726

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

ALIBABA GRP ADR is currently 8.2% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BABA.N and have had this outlook for the last 25 periods.

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