The shares of Alibaba Group Holdings Ltd. rose more than 5% in Hong Kong trade on Monday after the e-commerce giant was fined a record $ 2.8 billion by the Chinese antitrust regulator.
On Saturday, China’s state market regulation administration said Alibaba was abusing its dominant position over rivals and traders on its platform. In addition to the fine, Alibaba must renew its operations and submit a compliance report within three years.
“Alibaba accepts the fine with sincerity and will ensure that it is enforced,” the company said in a statement. “To serve its responsibility to society, Alibaba will work with the utmost dedication in accordance with the law, continue to strengthen its compliance systems and build on growth through innovation.”
Now that the dark cloud of the investigation is gone, stock Alibaba 9988,
shot more than 8% higher in early Hong Kong trading, before settling for about 5.5% gain, paving the way for its American Depository Receipts BABA,
to probably jump when trading starts Monday.
“Despite the record amount, we think this should eliminate a large overhang on BABA and shift the market’s focus back to fundamentals,” Morgan Stanley said in a note on Sunday.
“Now that the fine has been set, market uncertainty about Alibaba will be reduced,” Everbright Sun Hung Kai analyst Kenny Ng wrote in a note. “The implementation of this fine is expected to allow Alibaba’s share price to regain the market’s attention.”
Alibaba’s shares in Hong Kong have remained stable to date and are up 20% in the last 12 months. Adverse events have decreased by 4.5% this year and by 13.7% in the past year.