Alibaba picks NYSE over NASDAQ for IPO

The Chinese e-commerce giant has chosen the New York Stock Exchange for its US listing, dealing a blow to NASDAQ which has also been courting the company.

Source: Bloomberg

Alibaba will list with a ticker symbol BABA, which sounds like “eight eight” in Chinese, an auspicious number. Details on the listing date are not final yet, but speculation is high that it will debut on August 8, with a float of 12% of the company. This could raise an estimated $20 billion and make it the largest US IPO ever, eclipsing Facebook’s IPO of $15 billion.

The choice of NYSE comes as little surprise following the reputation hit on NASDAQ, when its technical glitches marred Facebook’s listing in 2012 with trading delays and investor confusion. It’s also the latest win in the tech space for NYSE, which has been steadily chipping away at NASDAQ’s lead as the first port of call for technology companies.

According to Bloomberg data, NASDAQ has snagged 122 technology and Internet IPOS from 2001 to 2011, versus NYSE’s 42. However, it looks like the pendulum is swinging the other way based on IPOs from 2012: NYSE has won 45 tech IPOs versus NASDAQ’s 35.

Benefitting from Alibaba’s growth

Ahead of the IPO, Yahoo has been one of the biggest beneficiaries of the excitement over Alibaba. It currently holds a 22.6% stake, and has been, to an extent, a proxy for Alibaba’s growth. The Chinese company posted revenues of $5.66 billion and net profit of $2.85 billion for the nine months ended December. Over the past 12 months, Yahoo’s share price has risen over 30% and it could be in for a windfall of over $35 billion if it sells out of its stake, more than its current market capitalization of $33.8 billion.

Ahead of the Singapore Open

Japan’s inflation numbers were in-line with expectations. Core CPI was at +3.4% year-on-year, against market forecasts of 3.4%. This suggests the Bank of Japan is on track to hit its inflation targets. The USD/JPY did not immediately react much to the data but has started to weaken a touch in morning trade.

Trading on Wall Street was largely flat overnight, closely just slightly in the red amid some hawkish comments from St. Louis Fed President James Bullard.

We are calling for the MSCI Singapore to open -0.65 points down at 371.40.

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