ASX goes up; the energy and utilities sectors lead the gains
Alibaba Group Holding fell on Monday amid growing fears the stock could be forced off US exchanges for failing to comply with US disclosure rules.
Shares of the e-commerce giant fell 5.7% in Hong Kong to drag down the Hang Seng Tech index, which fell 1.8%. The US securities watchdog on Friday added the stock to a growing list of companies facing removal due to Beijing’s refusal to allow US officials to review the work of their auditors.
Shares of Alibaba briefly rebounded early last week amid optimism that the company’s plans to seek a primary listing in Hong Kong would help it attract more mainland investors. The gains have since faded as traders brace for the company’s earnings report due this week, with analysts predicting the company will report its first-ever negative quarterly revenue growth.
“Alibaba’s recent application to the HKEX for dual primary listing status and the lack of positive news on US-China negotiations on audit issues have likely led the market to believe more firmly that Chinese ADRs will inevitably be withdrawn. off the list,” Jefferies analysts wrote. on Sunday.
Alibaba said it would seek to maintain its listed status on both the NYSE and the HKEX and would comply with applicable laws and regulations, according to a statement to the Hong Kong stock exchange.
The stock has fallen 27% from its July high, after climbing 70% from a record low reached in March. Its recovery lost momentum as it was reported that company executives had been questioned by authorities in connection with a data theft case and the company had been fined for not have correctly reported past transactions.