Investors in Hong Kong can have the chance to take part in Alibaba’s mega share offering for as little as HK$200,000 (US$25,803) as the Chinese technology giant prepares for its trading debut on the New York Stock Exchange this Friday.
Many local investors were disappointed when Alibaba decided to give up its bid to float its shares in the city following regulatory objection to its dual-class shareholding structure. But they can still try to get a piece of the action through international placing, Sing Tao Daily reported Monday.
Phillip Securities, which is offering services for investors who want to acquire Alibaba shares, said the minimum amount for subscription is HK$2 million, but investors only have to pay 10 percent as deposit.
In Hong Kong, investors have to pay the full subscription amount in cash or through margin before they can enter the lot-drawing process, but in New York, they are only required to pay the full amount after they are allocated the shares, said Matthew Wong, a manager at Phillip Securities.
As the demand for Alibaba shares is expected to exceed the supply, Hong Kong investors may only be able to get 1 to 2 percent of the subscribed shares — if at all. Phillip Securities requires its clients to pay 10 percent, or HK$200,000, as deposit.
Phillip Securities will get 1.25 to 1.5 percent of the subscription amount as commission, according to the report.
Unlike in Hong Kong, the IPO market in the United States does not have a lot-drawing exercise. Brokers can negotiate with the underwriters to see how many shares they can get.
Phillip Securities has received a quota of HK$3 billion for Alibaba’s international offering because of its relationship with Citi Group, one of the IPO underwriters.
Haitong International Securities, on the other hand, said its clients have to pay the full subscription amount of at least US$200,000 to acquire the shares, as per the arrangement with its US brokers, which will process the applications.
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