Alibaba may be booted off NYSE

Shares in Chinese e-commerce giant Alibaba Group fell by 4% last week amid “escalating concerns that the stock may be booted off” the New York Stock Exchange in two years “for failing to comply with US disclosure rules”, says Jenny Yu on Bloomberg.

The US on Friday added the stock to a “growing roster” of Chinese companies facing removal from US exchanges. The problem stems from the fact that a law passed two years ago means that Chinese companies are required to submit their audits to regulators so that their quality can be reviewed, something that Beijing refuses to allow. Alibaba could temper the impact of a potential de-listing in the US by accelerating its plans to upgrade its Hong Kong stock-exchange presence from a secondary to a primary listing, says Iris Deng in the South China Morning Post.

That would help create a “wider and more diversified investor base” as it would give mainland Chinese investors direct access to the group’s shares via the Stock Connect programme. Meanwhile there is hope that the US and Beijing could reach a deal with both sides in discussions to resolve the “accounting spat”.

Still, even if Beijing does make enough concessions to allow Alibaba to remain in America, Alibaba has other problems to grapple with, says Oliver Telling in the Financial Times.

It has been “hit by Beijing’s crackdown on the technology sector”, while a foray into the American e-commerce market has been botched. No wonder, then, that its Hong Kong-listed stock has slumped by 70% since 2020.