Alibaba raises stake in top Chinese investment bank
Date
2/20/2019 3:44:17 PM
(MENAFN- Gulf Times) Alibaba Group Holding Ltd has acquired another chunk of shares in China International Capital Corp for about HK$1.8bn ($230mn), enlarging its stake in a prestigious investment bank that can help propel deals and financial transactions around the world.
The e-commerce giant bought 117.1mn Hong Kong-listed shares at HK$15.50 apiece on February 14, CICC said in a filing.
That expanded its stake to about 11.7% of stock listed in the city from roughly 5%, almost matching Tencent Holdings Ltd's 12%.
CICC's Hong Kong shares leapt as much as 11.1% yesterday, marking their biggest intraday jump in more than a year.
Alibaba joins arch-rival Tencent as a backer of CICC, once dubbed China's Goldman Sachs after it brought some of the country's largest state-run firms to market.
The financial house however has been reducing its dependence on volatile investment banking fees and expanding its business catering to rich individuals.
In 2017, it completed a $2.5bn purchase of China Investment Securities Co, plunging into the retail investor market.
Set up in 1995, CICC was part-owned by New York-based Morgan Stanley until 2010. Its shares were listed in Hong Kong in 2015.
Overall, Alibaba now holds about 4.84% of CICC's total issued shares on a fully diluted basis, an Alibaba representative said.
'Its strength as a boutique investment bank is unparalleled domestically. It will be a good complement to Alibaba, which is doing many deals and can use a lot of advisory service, said Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities Co. 'The purchase serves Alibaba's business strategy.
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