Several of Alibaba’s biggest investors have converted billions of dollars in US shares for Hong Kong stock in part to avoid potential US sanctions and delistings of big Chinese technology companies.
Temasek Group Holdings, Baillie Gifford and Matthews Asia are among the major shareholders that swapped stakes in the Chinese e-commerce company to take advantage of new rules easing the switch after Alibaba’s listing in Hong Kong last year.
Geopolitics is also contributing to the shift.
“Lots of long-term fund managers, especially the ones ... based in Asia, are switching or considering switching from ADRs [American Depository Receipts] into Hong Kong-listed shares,” said Nelson Yan, head of offshore capital markets investment at Creditease Wealth Management in Hong Kong.
“Demand for these ADRs in the US is now clouded by the politics.”
The Alibaba share conversions are a sign that the US government's fierce rhetoric against Chinese technology companies is prompting investors to take steps to avoid the potential fallout.
At the same time, as Chinese companies seek more dual listings in Hong Kong, the moves threaten to drain liquidity of the New York shares.
Baillie Gifford, whose partner and portfolio manager James Anderson told Bloomberg TV in March that Alibaba could become a $2 trillion (Dh7.34tn) company, swapped 10.4 million US-listed shares worth about $2.67 billion in the second quarter.
That is about a fifth of its stake and is the biggest change since it first bought shares in 2014.
The money manager, among Alibaba’s largest shareholders, swapped the shares for Hong Kong-listed stock.
A spokesperson for the Edinburgh-based company declined to comment.
A spokesman for Singapore’s state-owned investor Temasek confirmed that it swapped half of its stake representing 12.1 million shares – worth about $3bn – from the US to Hong Kong, but declined to comment further.
The issue has been on top of the mind of many institutional investors since May when the US Senate overwhelmingly approved S.945 – a bill that could lead to Chinese companies being banned from listing on US exchanges.
Conditions include being able to certify that they are not under the control of foreign governments and allowing the Public Company Accounting Oversight Board to audit the business.
Matthews Asia, which manages about $23.4bn, divested almost three quarters of its US Alibaba shares in the second quarter, worth about $700 million. Much of that is now held in H-shares in Hong Kong and in its Pacific Tiger Fund, whose lead manager is Sharat Shroff.
“Venue does not really matter a whole lot – it’s about getting access to liquidity and it’s about getting access to the right pricing mechanism so we continue to have a position in Alibaba both through the Hong Kong listing, as well as the listing in the US,” Mr Shroff told clients in a July webcast.
Keywise Capital Management, which oversees $1.5bn for global investors including sovereign wealth funds and endowments, plans to invest in the Hong Kong shares of dual-listed Chinese companies, said founder and chief investment officer Zheng Fang.
The increased US scrutiny of Chinese ADRs has led to investor concerns about the potential risks of holding these securities, he said.
The Hong Kong shares may also get a boost from MSCI’s plan to reduce Chinese ADR weightings in its indexes, while raising Hong Kong shares, he said.
Once listed in Hong Kong, those companies may be included in the share connect scheme with China, allowing them to attract support from mainland Chinese investors, he said.
Myriad Asset Management, the hedge fund led by Carl Huttenlocher, also swapped most of its Alibaba ADRs for Hong Kong shares.
With more of Alibaba’s peers listed in Hong Kong, expectations are that it will become easier to compare valuations and do hedged trades.
The share moves are already boosting Alibaba’s trading in Hong Kong.
On a 50-day moving average basis, Hong Kong’s daily turnover now accounts for about 17 per cent of the company’s total trading, up from a low of 13 per cent in early June.
The float has also risen. Alibaba’s shares trading in Hong Kong have jumped 4.3 times to 2.5 billion, according to data disclosed with the Hong Kong exchange as of Friday.
Hong Kong shares now account for about 12 per cent of Alibaba’s total float, compared with 2 per cent before.
Investors in the Hong Kong shares have been rewarded, with the stock gaining 45 per cent since the November listing, compared with a 35 per cent jump in the US stock over the same period in local currency terms.
The Hong Kong shares may attract even more institutional investors when Alibaba joins the Hang Seng Index on September 7.
Alibaba rose by 3.6 per cent to $33.81 in Hong Kong on Monday.
“The majority of its shares are still in the US, but the relocation is already happening and that is driven by long-term holders,” said Kenny Wen, Hong Kong-based strategist at Everbright Sun Hung Kai.
“In the very long run, we can’t exclude the possibility for Hong Kong to become the primary listing place for Alibaba.”
All%20The%20Light%20We%20Cannot%20See%20
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WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
Name: Colm McLoughlin
Country: Galway, Ireland
Job: Executive vice chairman and chief executive of Dubai Duty Free
Favourite golf course: Dubai Creek Golf and Yacht Club
Favourite part of Dubai: Palm Jumeirah
FORSPOKEN
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Starfield
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Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
The specs
Engine: 4.0-litre, six-cylinder
Transmission: six-speed manual
Power: 395bhp
Torque: 420Nm
Price: from Dh321,200
On sale: now
Mercedes V250 Avantgarde specs
Engine: 2.0-litre in-line four-cylinder turbo
Gearbox: 7-speed automatic
Power: 211hp at 5,500rpm
Torque: 350Nm
Fuel economy, combined: 6.0 l/100 km
Price: Dh235,000
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
The Vile
Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah
Director: Majid Al Ansari
Rating: 4/5
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'Munich: The Edge of War'
Director: Christian Schwochow
Starring: George MacKay, Jannis Niewohner, Jeremy Irons
Rating: 3/5
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
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Biography
Her family: She has four sons, aged 29, 27, 25 and 24 and is a grandmother-of-nine
Favourite book: Flashes of Thought by Sheikh Mohammed bin Rashid
Favourite drink: Water
Her hobbies: Reading and volunteer work
Favourite music: Classical music
Her motto: I don't wait, I initiate
UAE's role in anti-extremism recognised
General John Allen, President of the Brookings Institution research group, commended the role the UAE has played in the fight against terrorism and violent extremism.
He told a Globsec debate of the UAE’s "hugely outsized" role in the fight against Isis.
"It’s trite these days to say that any country punches above its weight, but in every possible way the Emirates did, both militarily, and very importantly, the UAE was extraordinarily helpful on getting to the issue of violent extremism," he said.
He also noted the impact that Hedayah, among others in the UAE, has played in addressing violent extremism.
Tesalam Aleik
Abdullah Al Ruwaished
(Rotana)
Multitasking pays off for money goals
Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.
That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.
"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.
Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."
People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.
"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."
UAE SQUAD
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Salem Rashid, Mohammed Al Attas, Alhassan Saleh
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Yahya Nader, Ahmed Barman, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah, Yahya Al Ghassani
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
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UAE currency: the story behind the money in your pockets
Pots for the Asian Qualifiers
Pot 1: Iran, Japan, South Korea, Australia, Qatar, United Arab Emirates, Saudi Arabia, China
Pot 2: Iraq, Uzbekistan, Syria, Oman, Lebanon, Kyrgyz Republic, Vietnam, Jordan
Pot 3: Palestine, India, Bahrain, Thailand, Tajikistan, North Korea, Chinese Taipei, Philippines
Pot 4: Turkmenistan, Myanmar, Hong Kong, Yemen, Afghanistan, Maldives, Kuwait, Malaysia
Pot 5: Indonesia, Singapore, Nepal, Cambodia, Bangladesh, Mongolia, Guam, Macau/Sri Lanka
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
BUNDESLIGA FIXTURES
Friday (all kick-offs UAE time)
Hertha Berlin v Union Berlin (10.30pm)
Saturday
Freiburg v Werder Bremen (5.30pm)
Paderborn v Hoffenheim (5.30pm)
Wolfsburg v Borussia Dortmund (5.30pm)
Borussia Monchengladbach v Bayer Leverkusen (5.30pm)
Bayern Munich v Eintracht Frankfurt (5.30pm)
Sunday
Schalke v Augsburg (3.30pm)
Mainz v RB Leipzig (5.30pm)
Cologne v Fortuna Dusseldorf (8pm)
How Apple's credit card works
The Apple Card looks different from a traditional credit card — there's no number on the front and the users' name is etched in metal. The card expands the company's digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. Its attributes include quick sign-up, elimination of most fees, strong security protections and cash back.
What does it cost?
Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases — 3 per cent on Apple purchases, 2 per cent on those with the virtual card and 1 per cent with the physical card. Apple says it is the only card to provide those rewards in real time, so that cash earned can be used immediately.
What will the interest rate be?
The card doesn't come out until summer but Apple has said that as of March, the variable annual percentage rate on the card could be anywhere from 13.24 per cent to 24.24 per cent based on creditworthiness. That's in line with the rest of the market, according to analysts
What about security?
The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it's protected by fingerprints or facial recognition. That means that even if someone steals your phone, they won't be able to use the card to buy things.
Is it easy to use?
Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement. Plus it includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision.
* Associated Press
Your rights as an employee
The government has taken an increasingly tough line against companies that fail to pay employees on time. Three years ago, the Cabinet passed a decree allowing the government to halt the granting of work permits to companies with wage backlogs.
The new measures passed by the Cabinet in 2016 were an update to the Wage Protection System, which is in place to track whether a company pays its employees on time or not.
If wages are 10 days late, the new measures kick in and the company is alerted it is in breach of labour rules. If wages remain unpaid for a total of 16 days, the authorities can cancel work permits, effectively shutting off operations. Fines of up to Dh5,000 per unpaid employee follow after 60 days.
Despite those measures, late payments remain an issue, particularly in the construction sector. Smaller contractors, such as electrical, plumbing and fit-out businesses, often blame the bigger companies that hire them for wages being late.
The authorities have urged employees to report their companies at the labour ministry or Tawafuq service centres — there are 15 in Abu Dhabi.
Stage results
1. Julian Alaphilippe (FRA) Deceuninck-QuickStep 4:39:05
2. Michael Matthews (AUS) Team BikeExchange 0:00:08
3. Primoz Roglic (SLV) Jumbo-Visma same time
4. Jack Haig (AUS) Bahrain Victorious s.t
5. Wilco Kelderman (NED) Bora-Hansgrohe s.t
6. Tadej Pogacar (SLV) UAE Team Emirates s.t
7. David Gaudu (FRA) Groupama-FDJ s.t
8. Sergio Higuita Garcia (COL) EF Education-Nippo s.t
9. Bauke Mollema (NED) Trek-Segafredo s.t
10. Geraint Thomas (GBR) Ineos Grenadiers s.t
