(Bloomberg) -- Alibaba Group Holding Ltd. will be included in Hong Kong’s Hang Seng in one of the biggest revamps in the benchmark index’s 50-year history.Xiaomi Corp. will also be joining the index, as will Wuxi Biologics Cayman Inc., according to Hang Seng Indexes Co. on Friday as it unveiled the first major changes since the compiler began allowing dual-class shares and secondary listings.The move could affect tens of billions of dollars in pension fund assets and exchange-traded funds that track the index. Sino Land Co., Want Want China Holdings Ltd and China Shenhua Energy Co. were forced out of the 50-member gauge.The changes will be effective Sept. 7.The Hang Seng Index is down 11% for the year, compared with the 15% gain for China’s CSI 300 Index and the Nasdaq Composite’s 23% rise.Alibaba’s inclusion builds on the trend of China’s technology giants gaining more clout in Hong Kong markets -- so much that the compiler recently launched a new measure focused on tech.“The inevitable trend is for Hong Kong’s equity benchmark to lose more local features and represent more of the Chinese economy,” according to Jackson Wong, asset management director at Amber Hill Capital Ltd, who spoke before the announcement. “Adding these companies will help it better reflect changes in the city’s equity market.”As of Friday’s trading close, at least 26 firms out the 50 Hang Seng members generate the majority of their revenue from the mainland.More listings of mainland Chinese firms are in the pipeline, such as by Alibaba founder Jack Ma’s Ant Group, after debuts by NetEase Inc. and JD.com Inc. Listing closer to home has become more attractive as tensions between Washington and Beijing threaten to curtail China Inc.’s access to U.S. capital markets.Dual-class and secondary listings will each be subject to a 5% weighting cap, compared with a maximum 10% limit for others. Dual-class shares were long blocked from listing in Hong Kong due to concern over unequal voting rights until Xiaomi’s debut in 2018.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- SenseTime Group Ltd., China’s largest artificial intelligence company, is exploring a dual listing in Hong Kong and China as it closes in on $1.5 billion of pre-IPO financing, according to people familiar with the matter.The SoftBank Group Corp.-backed company is seeking a pre-funding valuation of about $8.5 billion before kicking off an initial public offering, the people said, requesting not to be named because the matter is private. Sensetime is leaning toward a dual listing in Hong Kong and China though it hasn’t finalized a timeline, the people said. Its IPO plans are preliminary and subject to change, they added.The startup is kickstarting plans for an IPO that had been waylaid by pandemic-induced market volatility as well as a U.S. blacklisting that threatens to curtail its access to vital American technology. It’s now considering tapping markets in Hong Kong and mainland China simultaneously, betting on a recent resurgence of investor interest in new listings.SenseTime is at the vanguard of a rising crop of Chinese players that have benefited from the country’s rapid adoption of facial recognition technology and AI across a plethora of sectors. The company is working with 127 cities across its home country to use cameras to analyze everything from traffic to residential complex security.A representative for SenseTime declined to comment.SenseTime became the world’s most valuable AI startup after it raised about $2.5 billion in 2018. It was valued at more than $7.5 billion, drawing investors including SoftBank and Singapore’s Temasek Holdings Pte., people familiar with the deal said at the time. Its revenue grew 147% to 5 billion yuan ($720 million) in 2019, the company said.The firm, which competes with Alibaba Group Holding Ltd.-backed Megvii Technology, specializes in systems that analyze faces and images on an enormous scale and works with policing bodies, retailers and health-care researchers across China and internationally. The startup has said it experienced exponential growth in past years as it expanded into more industries, from cameras in retailer Suning.com Co.’s stores to driverless cars for Honda Motor Co.(Updates with SenseTime revenue figure in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Should investors consider buying Alibaba stock with the tech titan set to report its June quarter results before the market opens on Thursday, August 20?