Alibaba Won’t Join Hong Kong’s Stock Benchmark Any Time Soon

(Bloomberg) -- Alibaba Group Holding Ltd. won’t feature in Hong Kong’s most widely followed stock benchmark unless the index provider significantly overhauls its rules.

Alibaba is “not in the eligible stock universe” to be considered to join the Hang Seng Index, said Daniel Wong, director & head of research and analytics at Hang Seng Indexes Co. on phone. That is because companies with unequal voting rights or going for secondary listings are not eligible for the inclusion under the index compiler’s current rules, he said.

Hang Seng Indexes Co. will start a consultation “as soon as the end of this year” to review the eligibility of such companies, said Wong.

Alibaba’s share structure that carries unequal voting rights was one of the reasons Hong Kong lost out to New York in 2014 for the company’s initial public offering.

Alibaba will be able to join the Hang Seng Composite Index, a broader gauge whose medium and large caps can be accessed by mainland investors via trading links. No listing history is required to be able to join the HSCI, according to the index compiler’s rules.

China allowed onshore investors to buy dual-class shares traded in Hong Kong for the first time in October. Xiaomi Corp. and Meituan Dianping are available via the trading links.

To contact the reporter on this story: Jeanny Yu in Hong Kong at jyu107@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Fran Wang, Philip Glamann

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