The shares of Alibaba Group Holdings Ltd. rose more than 5% on Monday in Hong Kong trade, after China’s antitrust regulator fined the e-commerce giant a record $ 2.8 billion.
On Saturday, the Chinese State Administration for Market Regulation said Alibaba abused its dominant position over rivals and traders on its platform. In addition to the fine, Alibaba must renew its operations and file a compliance report within the next three years.
“Alibaba sincerely accepts the penalty and will ensure its compliance with determination,” the company said in a statement. “To fulfill its responsibility to society, Alibaba will operate in accordance with the law with the utmost diligence, continue to strengthen its compliance systems and build on growth through innovation.”
With the dark cloud of investigation gone, Alibaba operated 9988,
shot up more than 8% in Hong Kong’s top businesses, before consolidating with gains of around 5.5%, setting the stage for its BABA American deposit receipts,
it is likely to jump when trading starts on Monday.
“Despite the record amount of fine, we believe this should elevate a significant advance to BABA and re-focus the market on fundamentals,” Morgan Stanley said in a note on Sunday.
“Now the penalty is set, market uncertainty about Alibaba will be reduced,” Everbright Sun Hung Kai analyst Kenny Ng wrote in a note. “The application of this penalty is expected to allow Alibaba’s share price to regain market attention.”
Alibaba’s shares in Hong Kong are flat so far, rising 20% in the last twelve months. Its ADRs have fallen 4.5% this year and are up 13.7% from last year.