Could someone explain one thing to me?
Shares of Alibaba Group and Tencent in Hong Kong strengthened on Monday following the $984 million fine against Ant Group, founded by Jack Ma (Alibaba $BABA+1.1%). This could signal the end of regulatory crackdowns against the country's tech sector.
Alibaba
BABACapital Structure
Market Cap
184.7B
Enterpr. Val.
1.2T
Valuation
P/E
14.3
P/S
1.4
Dividends
Yield
0.2%
Payout
0.0%
Overall, this is positive news, which is why it's striking that BABA is +3.2% on the HKG exchange but negative in premarket trading on the NYSE. How can the same company's performance be different on two different exchanges and after more or less good news?
Shouldn't this be settled by arbitration?
Can I ask for an explanation? 😀 What is it and how does it work?
check Google, pretty cool site;)
As has already been said, there may be several reasons - macro, different demand, time lags and exchange rate differences.
Thanks, I've been living under the assumption that it works the same despite listing on multiple exchanges.
This is most likely due to the fact that investors from other countries who invest in ADRs are putting more weight on economic data - they fear possible deflation. In contrast, investors in 9988.HK are more likely to see the possible easing of regulations just mentioned.
Shouldn't the fear of deflation be in China? After all, it means problems for their companies. I read something about it this morning, and they say companies may have lower sales, worse results and so on.
I would think so too, on the contrary, I would think that foreign investors will put more emphasis on the retreat of regulations, but again we have to take into account the political situation in Hong Kong. I guess it really does carry more weight for them. Whereas everywhere else, the economic situation in China is more of a factor.
I've encountered this a few times too, for all I know it could be a difference in macroeconomic conditions of the country or time lags between markets. I.e. stock exchange A may reflect new information faster than stock exchange B.
I'd say in this case it may just be the macro. I read this morning that they are worried about deflation, but again the question is how China will handle it. Will it pump more money in?