Alibaba Shares Spike Over 4% In Hong Kong After Stock Connect Programs Give Mainland China Investors Greater Access

Alibaba Group Holding BABAF BABA saw its Hong Kong-listed shares rise by 4.28% on Monday. The surge followed the inclusion of its ordinary shares in the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs.

What Happened: The company’s shares were trading at HK$81.65 after the announcement. The inclusion means that eligible investors in Mainland China can now directly trade Alibaba’s ordinary shares listed on the Hong Kong Stock Exchange.

The Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs facilitate mutual market access between Mainland China and Hong Kong. These programs allow Mainland Chinese investors to trade eligible Hong Kong shares and vice versa, subject to daily quotas.

Effective Sept. 10, the inclusion was confirmed by announcements from both the Shanghai Stock Exchange and the Shenzhen Stock Exchange. This development is expected to enhance liquidity and broaden the investor base for Alibaba’s shares.

See Also: Palantir Stock Soars In Monday Premarket: What’s Driving The Surge?

Why It Matters: Alibaba’s inclusion in the Stock Connect programs is a significant milestone, potentially bringing billions in investment from approximately 200 million mainland-based investors.

This development follows Alibaba’s recent strategic moves, including a collaboration with Mastercard Inc. MA to offer new perks for U.S. business owners. This partnership aims to attract businesses for cross-border and domestic sourcing purchases through Alibaba.com.

Additionally, Alibaba has been expanding its presence in the U.S. market with the launch of a new AI-powered sourcing tool, designed to simplify the sourcing process for American buyers.

Furthermore, Alibaba recently received a clean chit from domestic regulators after over three years of antitrust scrutiny, which positively impacted its stock.

Price Action: Alibaba Group Holding Ltd – ADR closed at $81.44 on Monday, marking a gain of 0.32% for the day. In after-hours trading, the stock rose 0.61%. Over the past year, the ADR has declined by 8.20%. However, its Hong Kong-listed shares have seen a significant year-to-date increase of 9.17%, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote