Before the release of what might be the biggest initial public offering in the United States history, Alibaba's growing appetite has already affected the market. For those Chinese investors who are unable to invest on Alibaba shares, they have taken advantage of the next best thing.
Mainland traded companies such as Hundsun Technologies Inc. and China Shipping Container Lines Co. who have a connection with the e-commerce giant, have rallied an average of 15 percent last month. Hundsun is a financial software developer and China Shipping is working with Alibaba on cross-border logistics. Hundsun and China Shipping both rose 24 percent and 19 percent respectively. Suzhou Gold Mantis Construction Decoration Co and Huayi Brother Media Corp both rose as parts of these companies are also connected to Alibaba. Since Chinese clients can't directly invest in Alibaba, they opted to invest in related companies.
Even investors in the United States have joined the market flow as Bank of America was reported to have been selling a structured product that involved betting on Alibaba's performance.
These market rallies can be attributed to the gaining confidence of investors on the new Alibaba IPO. This IPO has been the talk of the entire market ever since they announced their plan for the public offering. The Alibaba shared were estimated to raise $21.8 billion, which is one of the biggest public offering in history. The group is also expected to raise its estimated share price to $70 from its current price range of $60-$66. Alibaba will be listed on the New York Stock Exchange.
Deadline for order-taking is on September 16 for U.S. based investors and September 17 for investors located in Asia and Europe. Price will be set on September 18.
Alibaba is founded by Chinese billionaire Jack Ma. This e-commerce giant also owns and operates otehr e-commerce platforms such as Taobao Market Place and T-Mall.com.
