Alibaba's Shares Witness a Surge Post Regulatory Actions

Alibaba Group shares in Hong Kong opened 5.5% higher on Monday after China fined its affiliate, Ant Group, $984 million for violating laws and regulations, fueling hopes that a years-long regulatory crackdown on fintech has ended.

Ant Group announced a share buyback on Saturday, valuing the company at $78.54 billion, far less than the $315 billion touted in an abandoned IPO in 2020, but providing liquidity to investors.

Alibaba, which spun off Ant 11 years ago and owns 33% of the company, said on Sunday that it was considering participating in the buyback.

In early trading on Monday, Alibaba's share price rise outpaced a 2% rise in Hong Kong's Hang Seng Index.

Alibaba's U.S.-listed shares rose 8 per cent on Friday after the penalty, one of the largest-ever fines for an internet company in China, was delivered.

Ant and its subsidiaries had violated laws and regulations in areas including corporate governance, financial consumer protection, payment and settlement business, as well as anti-money laundering obligations, the People's Bank of China said.

Ant said on Saturday it proposed to all of its shareholders to repurchase up to 7.6 per cent of its equity interest at a price that represents a group valuation of approximately 567.1 billion yuan ($78.54 billion).

That is a steep 75 per cent discount to the $315 billion valuation in 2020 for what was set to be the world's largest IPO, had it not been derailed at the last minute by Chinese regulators.

The finalisation of Ant's penalty is seen as paving the way for the firm to secure a financial holding company licence, lift its growth rate and eventually revive its plans for a stock market listing.