What's Going On With Alibaba and Other Chinese Stocks Friday?

Alibaba Group Holding Limited BABA and other major companies in Hong Kong have faced significant stock losses, marking the city’s third consecutive week of declines and the worst start to a year since 2016. 

Alibaba closed lower by 1.3% on Thursday, with broader index KraneShares Trust KraneShares CSI China Internet ETF KWEB closing lower by 0.42%. Contrastingly, IShares China Large-Cap ETF FXI closed higher by 0.42% Thursday.

This downturn is driven by concerns over China’s economic future, with the Hang Seng Index dropping 0.9% to its lowest point since October 2022. 

Similarly, the Tech Index fell by 2.1%, and the Shanghai Composite Index saw a 0.3% decline, SCMP reports.

Key players like Tencent Holding Ltd TCEHY, Alibaba, and JD.com Inc JD experienced substantial decreases in their stock values. EV manufacturers BYD Co, Ltd BYDDF BYDDY, Li Auto Inc LI, and pharmaceutical companies Hansoh Pharma and Wuxi Biologics also witnessed notable stock drops.

Hong Kong’s stock market lost 6% this week, the most severe dip in nearly five months, due to disillusionment with China’s stimulus efforts and policy easing measures. 

This sentiment has led to significant sell-offs by foreign investors, who have reduced their investments in Chinese stocks to their lowest in over a year.

China’s central bank has maintained its key lending rates, and recent government reports indicate slower-than-expected growth and a significant decline in home prices. 

The average price-to-book value of stocks listed in Hong Kong has fallen to near-record lows, reflecting the market’s diminishing confidence.

The major Chinese internet firms, including Alibaba, rechanneled their investments in corporate services, healthcare, video games, advanced manufacturing, and AI startups.

Alibaba lost 42% last year as domestic regulatory scrutiny took a toll. At the same time, the company focused on organizational and management restructuring in the face of intense competition from domestic players like PDD Holdings Inc PDD.

Price Action: BABA shares are trading lower by 1.04% at $67.35 premarket on the last check Friday.

Is Alibaba A Good stock to buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Alibaba Gr Holding‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Alibaba does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 20.11%, you'll need to buy a share of Financial 15 Split by the 30th January, 2024. Once done, you can expect to receive a nominal payout of $0.13 on 9th February, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Alibaba Gr Holding will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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