Alibaba's Primary Listing in HK may get more Chinese Investors onboard

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Alibaba announced that it is seeking primary listing on Hong Kong.

It might not seem significant on the surface but if we understand the Chinese markets this could make a different in the long term.

Mainland investors are limited to A-shares investments and those HK-listed stocks on the Stock Connect programme.

Alibaba was first listed in the US and it is not available on the Stock Connect even when it floated in HK as a secondary listing.

You might be surprised to hear that foreigners are the majority shareholders of Alibaba even when most of its revenue was derived from China.

This Primary Listing could get Alibaba on the Stock Connect and hence open for Mainland investors to buy.

Mainland investors believe in their own enterprises more than foreigners and that could provide more price stability to Alibaba shares in the future.