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Investing.com-- Hong Kong shares of Alibaba Group (NYSE:BABA) surged on Wednesday, tracking a bounce in their U.S. counterparts after reports showed co-founders Jack Ma and Joe Tsai were acquiring shares in the e-commerce giant.
Alibaba’s HK shares (HK:9988) jumped 5.5% to HK$71.30 by 21:20 ET, and were the top performers on the Hang Seng index, which added 1.5%. The firm’s American Depository Receipts jumped nearly 8% in overnight trade.
Wednesday’s gains also saw Alibaba’s HK shares rebound from a 15-month low.
A New York Times report showed that Ma had acquired Hong Kong shares worth $50 million in the fourth quarter, while Tsai had bought about $151 million U.S. shares through his Blue Pool Management entity.
Ma had stepped down as executive chairman in 2019, but still held a substantial stake in Alibaba. Tsai is the current chairman of the e-commerce firm, after taking over the role from Daniel Zhang in 2023.
Ma had relinquished his control in Alibaba’s fintech unit Ant Group in 2023, following a botched attempt at listing the firm. He had also largely dropped out of the public spotlight since 2020, amid a widening regulatory crackdown against China’s biggest technology firms.
Tuesday’s report helped inspire some confidence in Alibaba, which was sold off heavily over the past year as plans for a six-way split fell through. The e-commerce giant was also facing increased competition in its home market from PDD Holdings (NASDAQ:PDD), while consumer spending in China also failed to pick up substantially from COVID-era lows.
The firm had also recently flagged increased difficulty in its artificial intelligence ambitions, due to a lack of access to the latest semiconductor technology following U.S. trade sanctions against China.
Still, some analysts have argued that Alibaba’s current, low valuations make the stock ripe for bargain-buying, citing a strong base and the potential to benefit greatly from a Chinese economic recovery.
Gains in Alibaba spilled over into other major Hong Kong tech stocks. Search engine giant Baidu Inc (HK:9888) (NASDAQ:BIDU) rose 4.8% in Hong Kong trade, while Tencent Holdings Ltd (HK:0700), which makes up the BAT (LON:BATS) trio with Baidu and Alibaba, rose 2.1%.
Streaming firm NetEase (NASDAQ:NTES) Inc (HK:9999) rose 4.9%, while online shopping platform Meituan (HK:3690) added 3.3%.
Major Hong Kong technology stocks were nursing steep losses over the past year, as a Chinese post-COVID economic recovery largely failed to materialize.
Broader sentiment towards Chinese markets was also supported by a Bloomberg report that the Chinese government was preparing a massive 2 trillion yuan ($278 billion) support package for local stocks.
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