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Jack Ma, co-founder of Alibaba Group Holding, addressing teachers at an annual event he hosts to recognise rural educators, streaming on a laptop arranged in Hong Kong, China, on Wednesday, January 20 2021. Picture: BLOOMBERG/JUSTIN CHIN
Jack Ma, co-founder of Alibaba Group Holding, addressing teachers at an annual event he hosts to recognise rural educators, streaming on a laptop arranged in Hong Kong, China, on Wednesday, January 20 2021. Picture: BLOOMBERG/JUSTIN CHIN

A video of Jack Ma addressing teachers on Wednesday spurred the biggest stock rally in six months for Alibaba Group Holding, the retail behemoth he co-founded two decades ago.

The stock rose as much as 11% in Hong Kong, adding the equivalent of about $63bn to Alibaba’s market value. More than 85-million shares had changed hands by 3pm, or about 2.5 times the three-month average for a full day. Alibaba Health Information Technology, which is controlled by Alibaba, surged as much as 18%.

Here’s how investors and analysts reacted to the news.

Alex Wong, director of asset management of Ample Capital 

It just takes one catalyst to spark a surge in Jack Ma-related shares when the broader market sentiment in Hong Kong is this good. We bought shares of Alibaba on Tuesday so we won’t buy more right now. The main concern is regulation targeting Ant Group — as long as the policy risk doesn’t change significantly, Alibaba will be fine. The downside risk is mostly priced in but we don’t see a limit to the upside, especially as Alibaba is yet to be added to the stock connect links that are attracting a lot of cash.

Justin Tang, head of Asian research at United First Partners in Singapore

The annual event is the perfect setting for Jack to reappear in the public spotlight. The backdrop sees Jack in his roots as a humble school teacher vs being a haughty entrepreneur that doesn’t know his place. The whole scene allows Jack to show contriteness without being scripted.

Wei Wei Chua, a portfolio manager at Mirae Asset Global Investments Hong Kong 

His reappearance can only be a good thing, but it’s unhelpful to speculate on the viability of an Ant Group listing at this point.

Jackson Wong, director of asset management at Amber Hill Capital 

The video shows that, politically, Jack Ma is allowed to resurface. At the very minimum this proves he’s not in prison or banned from appearing in public, but it could also be a sign that Ma’s companies may have reached a deal with the government to settle their anti-trust issues. That’s what investors are waiting for.

Ma’s appearance will help Alibaba’s stock reach at least HK$275, its previous high. The overhang on Alibaba’s shares is not completely removed though — the anti-trust regulations on the sector were triggered by him.

Zhang Fushen, senior analyst at Shanghai PD Fortune Asset Management

Alibaba is not out of the doghouse, but at least it’s clear that the current anti-monopoly drive is not about punishing Jack Ma. We’re not in a hurry to add Alibaba shares yet because the regulation hammer will still fall on these firms. By now it’s evident that the incident — and questions regarding his whereabouts — is inconsequential to Alibaba’s business operations.

Paul Pong, MD at Pegasus Fund Managers 

Now we are convinced that Jack Ma is fully collaborating with regulators. I didn’t think he’d be in jail, so I hadn’t sold any of my Alibaba shares. The stock will face resistance near HK$300 — the previous record at which investors were pricing in the valuation of Ant Group. It’s obviously hard to surpass that level for now.

Alvin Cheung, associate director at Prudential Brokerage 

What Jack Ma said during his appearance was quite uncontroversial. He wasn’t as aggressive as before, which is also a boost for investor sentiment. Alibaba’s stock has declined a lot since the crackdown on Ant Group, lagging other Chinese tech firms such as Tencent, Meituan and Xiaomi. I see a good entry time now as his appearance removes a key overhang for the company.

Brock Silvers, MD at private-equity fund Kaiyuan Capital in Hong Kong

Jack Ma’s unexpected re-emergence — just as sudden as his disappearance — is likely a sign that his relationship with Beijing’s regulatory authorities has stabilised. That doesn’t necessarily mean that Ma’s corporate empire is free from worry. A path acceptable to all parties may have been identified, but Ant Group still looks likely to be disaggregated and regulatory restrictions will almost surely take a significant bite out of Ant’s former valuation.



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