TOKYO, March 28, 2018 /PRNewswire/ -- Kangyo Yokohama Securities have recently commented E-commerce giant Alibaba Group is seriously weighing a listing in China, potentially providing a powerful boost to the mainland financial markets as the authorities are preparing to launch depository receipts.
Kangyo Yokohama Securities research and analysis department have highlighed that the company aims to woo tech giants listed offshore, China depositary receipts (CDRs), similar to US depositary receipts, will be launched in the second half of 2018, head of the Chinese securities watchdog was quoted as saying earlier in this month.
Alex Parker, Head of Corporate Equities at Kangyo Yokohama Securities commented saying "the planned move forms part of efforts by China to enable these overseas-listed tech giants to find ways to float shares on domestic exchanges."
The new investment vehicles, though are not technically stocks, give local investors exposure to some of the country's top tech firms as CDRs allow them to hold shares listed outside mainland.
Back in 2014, Alibaba Group Holding held a record $25 billion initial public offering in New York after financial regulators in China and Hong Kong didn't accept its proposed governance structure.
"Listing of overseas-listed, domestic technology companies in China could help drive more funds from the mainlanders, and also help convince global companies later, in particular technology-related ones, to explore the possibility of selling shares in Chinese market," said Charles Roth, Head of Corporate Trading at Kangyo Yokohama Securities.
It also secures greater access to China-based investors, who are familiar with its operations, and allow Alibaba to benefit from Beijing's growing support for financial services innovation.
Similar to many China's biggest tech companies, Alibaba has opted for New York or London listings instead of their home market. The list includes Baidu, Sogou Inc., JD.com, and Tencent Holdings Ltd.
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SOURCE Kangyo Yokohama Securities