Chinese e-commerce juggernaut Alibaba is going to make its market debut as it is going public in New York by appearing in the list on the New York Stock Exchange with the ticker symbol BABA. Alibaba is expected to be among the best IPO’s ever happened this decade.
But the fate of the Chinese Internet behemoth’s endeavor would largely depend on how easily it is accepted by the US buyers, who have not yet invested in Chinese stocks clamoring for shares. Alibaba is expected to raise more than USD 20 billion, which would make it one of the largest offerings ever.
A survey, conducted by the ConvergEx Group, of more than 300 institutional investors raises doubt over whether these buyers can be convinced.
According to the survey, widespread optimism prevails about the fate of Alibaba’s business model. Moreover, its potential performance as a publicly-traded stock is also trustable. But whether this optimism translates into plans to buy into the company is doubtful.
According to the survey, 43 percent of the participants have plans to buy shares of the company. And 64 percent of them find Alibaba as a good long-term investment. Moreover. 88 percent of the participants expect the stock to appreciate in the first month of trading.
Market insiders say fund managers, who have not yet invested in Chinese stocks, are likely to be the worst buyer of Alibaba. The survey shows only 38 percent of those fund managers said they would buy Alibaba’s stock in comparison to the 60 percent who have already purchased shares of Chinese companies.
Industry insiders believe the biggest challenge before the firm is to attract the non-traditional buyers for Alibaba’s underwriters and key to any short-term or long-term pop in its price.
“The challenge of an IPO is creating that illusion of scarcity. To do that in a deal of this size, you need to get those equity investors who haven’t invested in Chinese equities on board,” said Nicholas Colas, ConvergEx Group’s chief market strategist.
Search for Alibaba’s lucky date continues
Co-founder Jack Ma has, however, not chosen a final date for Alibaba’s market debut but he may take a call soon after consulting the feng shui masters.
Feng shui is an integral part of China’s traditional beliefs. Decision on crucial events, marriage proposals and others are finalized on numerology and cosmology. Business world is not an exception.
“If [Alibaba] knows that there are certain dates on the calendar that are going to be lucky dates, they would be foolish not to take advantage of that. Chinese investors are going to be thinking of these kinds of issues,” said Joseph Bosco, associate professor of anthropology at the Chinese University of Hong Kong.
The Temple Street night market fortune teller, Mary Li predicted August 14 and 15 as Alibaba’s lucky dates.
“Those days are big lucky dates this year,” she said.
Another fortune teller Ally predicted October as the best month for Alibaba’s market entry. The prediction was based on the “bazi” belief that a person’s destiny can be determined by when they were born. Ally, however, wasn’t very sure for the October as she didn’t has Ma’s exact birth hour
Keeping dates aside, Li said that she is hopeful that Ma will do well even if ideal date is not selected for Alibaba’s IPO.
According to Chinese face reading beliefs, Ma’s face has all the most prosperous features.
Li says Ma’s nostrils, which aren’t very prominent, indicates good financial prospects. His ears are placed higher on his head and this point to a strong character. His cheeks portray him as a man who can easily find fame and reddish palms reveal he has a lot of power. Last but not the least, his wide forehead and structured chin say that he will earn heavily in his life.
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