Alibaba stock comes out with a bang in Hong Kong debut

Alibaba’s stock popped nearly 7% in its Hong Kong debut — a strong showing for one of China’s most prominent tech companies.

Shares of the e-commerce firm closed up at 187.60 Hong Kong dollars ($23.97) on their first day of trading. The company’s secondary listing could raise as much as $12.9 billion, making it the largest public offering so far this year.

Alibaba trades under the stock code 9988 in Hong Kong. Nine and eight are considered to be lucky numbers in the Chinese culture, indicating long-lasting prosperity.

There’s been a lot of enthusiasm for the company’s arrival on the Hong Kong market. The offering has overperformed — a vote of confidence in Hong Kong, the Asian financial hub that has grappled with months of protests.

On Tuesday, 14 billion Hong Kong dollars ($1.8 billion) worth of Alibaba shares changed hands on the Hong Kong exchange, helping boost overall turnover. The main board turned over $133 billion Hong Kong dollars ($17 billion) worth of shares on Tuesday, 75% more than than the previous day.

The listing affords Alibaba the ability to impress Beijing in a big way. It’s a symbolic homecoming for a company that made its initial public trading debut in New York but is one of China’s technological crown jewels.

“We have come home,” Alibaba said Tuesday morning on its official account on Weibo, the Chinese equivalent of Twitter. The Weibo announcement also featured cartoon representations of the many animal mascots that Alibaba uses to represent its businesses — such as Tmall’s black cat and and Ant Financial’s ant.

“Five years ago, we said, if conditions permit, we will for sure return,” said Daniel Zhang, chairman and chief executive officer of Alibaba Group, at Tuesday’s listing ceremony. The company chose to conduct its IPO in New York instead of Hong Kong because the city’s exchange balked at a corporate structure that would have given management unprecedented powers.

Thanks to “capital market reform,” Zhang said, “we can make up for the regret five years ago when we missed Hong Kong.”

Alibaba’s US-listed shares closed up nearly 2% Monday on the New York Stock Exchange. Its IPO there in 2014 raised $25 billion and shattered records as the largest in history. (Saudi Aramco could soon surpass it.)

Stock performances on Tuesday were weaker elsewhere. Hong Kong’s benchmark Hang Seng Index opened 0.7% higher, but reversed gains to close down 0.3%.

Hong Kong Exchanges & Clearing, the city’s sole exchange operator, also opened in the green, but was down 0.4% at close. Chinese internet giant Tencent — Alibaba’s biggest domestic rival — fell 0.9%. Both HKEX and Tencent are components of the Hang Seng Index.

Japan’s Nikkei 225 ended up 0.4%, while China’s Shanghai Composite closed flat, but still in positive territory. South Korea’s Kospi index finished down 0.1%.

Investors may be looking out for more developments on US-China trade talks. China’s top trade negotiator Liu He had a phone talk with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Tuesday morning, according to a statement by China’s Ministry of Commerce.

Both sides “reached a consensus” on how to resolve each other’s key concerns, the statement said. They also agreed to maintain contact about a phase one deal.