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Hong Kong shares of Alibaba Group (NYSE:BABA) experienced a notable upswing on Wednesday, following reports of co-founders Jack Ma and Joe Tsai actively acquiring shares in the e-commerce giant. Alibaba’s HK shares (HK:9988) jumped 5.5% to HK$71.30 by 21:20 ET, emerging as the top performers on the Hang Seng index, which saw a 1.5% increase. Concurrently, the firm’s American Depository Receipts soared nearly 8% in overnight trade.
These gains marked a significant rebound for Alibaba’s HK shares, recovering from a 15-month low. A New York Times report disclosed that Jack Ma had purchased Hong Kong shares worth $50 million in the fourth quarter, while Joe Tsai acquired approximately $151 million worth of U.S. shares through his Blue Pool Management entity.
Despite stepping down as executive chairman in 2019, Jack Ma retained a substantial stake in Alibaba, while Joe Tsai assumed the role of the current chairman in 2023. The report underscored Ma’s reduced public presence since 2020, amid a regulatory crackdown on China’s leading technology firms.
The positive market response on Tuesday reflected renewed confidence in Alibaba, which had faced significant challenges over the past year, including the abandonment of plans for a six-way split and heightened competition from PDD Holdings (NASDAQ:PDD) in the Chinese market. Additionally, the company grappled with increased regulatory scrutiny and challenges in pursuing its artificial intelligence ambitions due to U.S. trade sanctions.
Analysts, however, view Alibaba’s current low valuations as an attractive opportunity for bargain-buying, citing a robust foundation and the potential to benefit from a Chinese economic recovery.
The impact of Alibaba’s gains spilled over into other major Hong Kong tech stocks, with Baidu Inc (HK:9888) (NASDAQ:BIDU) rising 4.8%, Tencent Holdings Ltd (HK:0700) increasing by 2.1%, NetEase Inc (HK:9999) climbing 4.9%, and Meituan (HK:3690) adding 3.3%.
Despite significant losses in major Hong Kong technology stocks over the past year, broader sentiment towards Chinese markets received a boost from a Bloomberg report suggesting the Chinese government’s preparation of a substantial 2 trillion yuan ($278 billion) support package for local stocks.
