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Hong Kong stocks slide with Alibaba’s 10% sell-off as US tech war kills asset spinoff plan, Jack Ma to cut stake

  • Steep losses in Alibaba Group and top Chinese tech leaders narrowed the market’s gain this week to 1.5 per cent
  • Cancelling AliCloud spinoff could erode the prospect of receiving in the group’s reorganisation dividends, analysts said

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A pedestrian looks at the electronic screen displaying Hang Seng Index stocks outside a bank in Mong Kok, Hong Kong. Photo: Winson Wong
Jiaxing Li
Hong Kong stocks slumped, dragged down by Alibaba Group’s worst sell-off in more than a year, after China’s biggest technology company scrapped a plan to spin off its cloud-computing business amid heightened tech war and cybersecurity concerns.

The Hang Seng Index sank 2.1 per cent to 17,454.19 on Friday, trimming the gain in the week to 1.5 per cent. The Tech Index lost 1.7 per cent, while the Shanghai Composite Index added 0.1 per cent.

Alibaba plunged 10 per cent to HK$73.25 , the most since an 11.4 per cent drop in October last year. The sell-off erased more than US$21 billion from its market value, in addition to US$20 billion overnight when its American depositary shares crashed 9.1 per cent in New York trading.

The stock also came under pressure after founder Jack Ma’s family trusts, JC Properties and JSP Investment, each disclosed a plan to sell about US$435 million worth of shares on November 21, according to their US exchange filings.

“This shift will raise concerns about the restructuring plan that just started this year,” said Willer Chen, senior analyst at Forsyth Barr Asia in Hong Kong. “The sum-of-the-part valuation argument looks likely to be undermined by the cancellation of the [potential] cloud IPO.”

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