Alibaba Shares Draw Bids at 3.4% Premium in Hong Kong Gray Market

(Bloomberg) -- Alibaba Group Holding Ltd.’s Hong Kong debut is already off to a decent start before the shares officially begin trading next week.

Some institutional investors saw bids for the shares as high as HK$182 on Friday in gray-market trading, according to two people familiar with the matter. That’s 3.4% above the issue price of HK$176. While there was selling interest at that price, there were no firm offers, one of the people said. The lowest bids were for HK$177.

It bodes well for the stock’s first day of trading on Nov. 26, showing demand to own a slice of the Chinese e-commerce company remains strong despite the uncertain outlook for Hong Kong’s equity market. Asia’s most valuable firm, which has traded in the U.S. since 2014, raised about $11 billion in a long-awaited Hong Kong stock sale, braving the worsening political unrest gripping the city.

Alibaba’s shares carry unequal voting rights, which was was one of the reasons Hong Kong lost out to New York in 2014 for the company’s initial public offering. The first company to sell shares with a dual-class structure in Hong Kong was Xiaomi Corp. in 2018. Its debut was not so successful.

To contact the reporter on this story: Sofia Horta e Costa in Hong Kong at shortaecosta@bloomberg.net

To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net

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