Alibaba hits new two-week high on news of Jack Ma’s return to China
2023.03.27 07:29
© Reuters.
By Geoffrey Smith
Investing.com — Alibaba (HK:) (NYSE:) ADRs rose in premarket trading on Monday on news that its founder and former CEO Jack Ma had returned to mainland China for the first time in a year, signaling an easing of tension between the government and the country’s wealthy Internet barons.
Ma had left China nearly 12 months ago against the backdrop of a regulatory campaign designed to clip the wings of its corporate technology champions, whose rapidly growing wealth had threatened to disrupt the balance of power in a country still tightly controlled by the Communist Party.
The crackdown had started with regulators stopping financial services conglomerate Ant Group, an affiliate of Alibaba, from going public in Hong Kong, a move that would have added billions of dollars more to Ma’s personal wealth.
Signs of a rapprochement had already become apparent in January, when the China Banking and Insurance Regulatory Commission agreed to let Ant Group’s consumer finance unit raise $1.5 billion in capital, albeit with a Hangzhou government entity taking a 10% stake in the venture. In the same month, Guo Shuqing, a senior central bank official, had said that the government’s campaign cracking down on the excesses of various fintech groups was “basically” over.
According to a post on its WeChat channel, the Hangzhou Yungu School hosted Ma recently for a day of discussions on the future of education, with special emphasis given to the implications of rapid developments in artificial intelligence technology.
“We must use AI to solve problems, not to be controlled by AI,” Ma was quoted by the South China Morning Post as saying.
By 06:50 ET (10:50 GMT), Alibaba ADRs, which had closed at their highest in two weeks on Friday, were up another 0.4%. The Internet platform’s Hong Kong-listed stocks had fallen 3.7% overnight, however, unable to escape the negative market sentiment generated by disappointing data on mainland Chinese industrial profits in the first two months of the year, which were down 23% from a year earlier.
