Shares of Alibaba Group Holdings Ltd. rose more than 5% on Monday in Hong Kong trading after the e-commerce giant received a record $ 2.8 billion fine from China’s antitrust regulator.
On Saturday, China’s 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 resume operations and submit a compliance report within the next three years.
“Alibaba sincerely accepts the punishment and will ensure compliance with the determination,” the company said in a statement. “In order 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 rely on growth through innovation.”
With the dark cloud of investigation now gone, Alibaba stock 9988,
recorded an 8% higher increase in early trading in Hong Kong, before settling at gains of around 5.5%, setting the stage for its US BABA deposit receipts,
to probably jump when trading starts on Monday.
“Despite the record amount of fines, we believe this should lift a major overrun on BABA and move the market focus back to the fundamentals,” Morgan Stanley said in a note on Sunday.
“Now the penalty is determined, the market uncertainty about Alibaba will be reduced,” Everbright Sun Hung Kai analyst Kenny Ng wrote in a note. “The implementation of this penalty is expected to allow Alibaba’s share price to regain market attention.”
Alibaba shares in Hong Kong are fixed so far and are up 20% in the last 12 months. Its ADRs have fallen by 4.5% this year and increased by 13.7% in the last year.