Shares of Alibaba Group Holdings Ltd. rose more than 5% in Hong Kong on Monday, after the e-commerce giant set a record $ 2.8 billion by China’s antitrust regulator.
China’s state administration for market regulation said on Saturday that Alibaba was abusing its dominant position vis-à-vis competitors and traders on its platform. In addition to the fine, Alibaba must refurbish its operations and submit a compliance report within the next three years.
“Alibaba accepts the fine with sincerity and will ensure that it adheres to determination,” the company said in a statement. “To serve its responsibility to society, Alibaba will function with the utmost care in accordance with the law, continue to strengthen its compliance systems and build on growth through innovation.”
With the dark cloud of the investigation now gone, Alibaba has stock 9988,
shot up more than 8% in early Hong Kong trade, before reaching a profit of around 5.5%, which determined the increase for its US depository BABA,
to likely jump when trading begins Monday.
“Despite the record of the fine amount, we think it should lift a large overhang of BABY and shift the focus of the market back to fundamental factors,” Morgan Stanley said in a Sunday note.
“Now the penalty has been determined, the 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 get Alibaba’s share price back in the market.”
Alibaba’s Hong Kong shares have been flat to date and have risen 20% over the past twelve months. The ADRs have fallen by 4.5% this year and by 13.7% in the past year.