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alibaba is included in the hong kong stock connect!

on september 9, the shanghai and shenzhen stock exchanges issued a notice stating that due to the adjustment of constituent stocks of the hang seng composite large cap index, mid cap index and small cap index, the list of hong kong stock connect (hereinafter referred to as hong kong stock connect) under the shanghai-shenzhen-hong kong stock connect has been adjusted and will take effect from the next hong kong stock connect trading day.

securities times reporter noticed that in this adjustment of the hong kong stock connect target list, 33 stocks including alibaba, sf express and zhixing automotive technology were added, while 33 stocks including poly real estate, shimao group and sino-ocean group were removed.

among the stocks added to the hong kong stock connect, alibaba has attracted the most attention, which means that southbound funds can buy alibaba shares through the hong kong stock connect starting from september 10.

on september 4, the hang seng index added a new fast inclusion rule for the hong kong stock connect index. securities that are eligible for southbound interconnection trading by converting from secondary listing to primary or dual primary listing will be included in the index in the next monthly regular adjustment if their closing total market value ranks in the top 10 among the existing constituent stocks. alibaba, which completed dual primary listings on the new york stock exchange and the hong kong stock exchange on august 28, became the first beneficiary of the new rule.

on august 28, alibaba group announced that it had officially completed its dual primary listing in hong kong, becoming a company with dual primary listings on the hong kong stock exchange and the new york stock exchange. at that time, the market expected that alibaba would be included in the hong kong stock connect as early as september.

data shows that since alibaba's secondary listing in hong kong in 2019, the majority of its publicly traded shares have been transferred to hong kong. in terms of market capitalization and trading volume, alibaba has always ranked among the top three hong kong stocks, and its major listing is a natural outcome.

goldman sachs research report predicts that after being included in the hong kong stock connect, southbound funds will bring alibaba a potential capital inflow of us$15 billion to us$16 billion (approximately rmb 106.7 billion to rmb 113.8 billion). morgan stanley research report also mentioned that in the long run, the proportion of southbound funds holdings may remain at a level of more than 10%, providing considerable incremental support for the company's value.

on the same day, the shanghai stock exchange and china securities depository and clearing corporation also issued the "shanghai stock exchange hong kong stock connect transaction risk disclosure statement mandatory terms (revised in 2024)", adding new risk warning content regarding some hong kong special technology companies.

specifically, the revised mandatory terms of the shanghai stock exchange's hong kong stock connect risk disclosure statement include that securities companies should post relevant rules in a prominent location at their business premises and publish them on their websites; securities companies should promptly update the "shanghai stock exchange hong kong stock connect transaction risk disclosure statement"; for investors who newly apply for hong kong stock connect trading rights, securities companies should fully inform them of the relevant risks and require them to sign a commission agreement and risk disclosure statement containing the revised mandatory terms; for investors who have already opened hong kong stock connect trading rights before the announcement, securities companies should provide reminders and explanations to investors who have signed the corresponding risk disclosure statements based on the relevant modifications, and retain records of the notification.