China’s Alibaba soars in HK debut
Shares in Chinese online marketplace more than double in value on opening day.
With its shares hitting HK$33.00 by midday on Tuesday, Alibaba.com was valued at roughly $21.4bn, making it the fifth most valuable internet firm in the world.
Petrochina meanwhile saw its stocks slip back early in Tuesday’s trade on the Shanghai exchange, a day after it became the first company in the world with a market value exceeding $1 trillion.
Demand for IPOs in both companies easily outstripped supply, indicating that investors are paying little heed to warnings that the China bubble is set to burst eventually.
Alibaba.com, in which US internet giant Yahoo is a key investor, is a business-to-business online marketplace linking Chinese manufacturers with buyers around the world.
| Alibaba.com |
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Revenue has grown from $48.2m in 2004 to $1.364bn in 2006 Forms part of the Alibaba Group which includes Yahoo’s China operation and Taobao.com, China‘s biggest online auction site |
It raised some $1.5bn from its IPO, with demand from investors exceeding allocation more than 150-fold, making it the biggest internet offering since Google in 2004.
Al Jazeera’s Beijing correspondent, Tony Cheng, says many investors see the fast growing e-commerce site as a gateway into China’s rapidly growing commercial dominance.
Alibaba.com was launched just eight years ago from a small apartment in the city of Hangzhou near Shanghai.
Today it employs more than 4,400 staff, its success built on providing small- and medium-sized Chinese manufacturers – selling everything from garden furniture to sex toys – a way to sell their products both domestically and around the world.
Last year it saw revenue of $1.364bn, up from $48.2m in 2004.
Appetite
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| Petrochina became the first company valued at more than $1 trillion [GALLO/GETTY] |
The popularity of Alibaba.com’s debut underscores the continued strong appetite among investors for Chinese stocks, a day after Petrochina rocketed to the top of the list of the world’s most valuable companies.
On Monday, China‘s largest oil and gas company saw the shares in its publicly-listed unit nearly triple in value on their first day of trading on the Shanghai exchange.
Petrochina’s Shanghai debut followed an IPO that raised $8.94bn – a record for a mainland share offering, although the bulk of the company remains in government hands.
The surge in share value made Petrochina the world’s most expensive company by market capitalisation and the first company in the world worth more than $1 trillion – more than double the value of US oil giant ExxonMobil.
On Tuesday, however, its shares in Shanghai slid back more than 6 per cent after a 13 per cent slump in its New York-traded stocks triggered by warnings that the stock was overvalued.
In Hong Kong, where Petrochina stocks are also traded, its shares were down 11 per cent since Friday’s close.
That meant its market value dipped below the $1 trillion mark after barely a day, although it remained easily the world’s largest company, worth about $930bn.