Hong Kong’s short-term rates have tumbled since 2018 amidst tepid demand.
A Bloomberg report revealed that Alibaba Group Holding’s planned secondary US$20b share sale could push Hong Kong’s borrowing rates up and strengthen the local dollar.
China’s largest company is considering a listing in Hong Kong, people familiar with the matter said, potentially rivaling AIA Group Ltd.’s initial public offering (IPO) in 2010 as the city’s biggest-ever share sale.
Liquidity would tighten in the weeks around a listing due to demand for cash from subscribers. Alibaba raised a record US$25b in its 2014 debut in New York.
Hong Kong borrowing costs climbed in the lead up to smartphone-maker Xiaomi Corp.’s IPO in 2018, with the one-month interbank rate hitting its highest since October 2008. Short-term rates then tumbled amidst tepid demand.
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