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RB
Ralphie Barlow
@ralphiebarlow · Jul 10

Could someone explain one thing to me?

Shares of Alibaba Group and Tencent in Hong Kong strengthened on Monday following the $984 million fine against Ant Group, founded by Jack Ma (Alibaba $BABA). This could signal the end of regulatory crackdowns against the country's tech sector.

Overall, this is positive news, which is why it's striking that BABA is +3.2% on the HKG exchange but negative in premarket trading on the NYSE. How can the same company's performance be different on two different exchanges and after more or less good news?

YE
Yorick Ericson @yorickericson Jul 10

Shouldn't this be settled by arbitration?

RB
Ralphie Barlow @ralphiebarlow Jul 10

Can I ask for an explanation? 😀 What is it and how does it work?

JB
Jason Bellier @neostonks Jul 10

As has already been said, there may be several reasons - macro, different demand, time lags and exchange rate differences.

RB
Ralphie Barlow @ralphiebarlow Jul 10

Thanks, I've been living under the assumption that it works the same despite listing on multiple exchanges.

RR
Rickie Reeve @rickiereeve Jul 10

This is most likely due to the fact that investors from other countries who invest in ADRs are putting more weight on economic data - they fear possible deflation. In contrast, investors in 9988.HK are more likely to see the possible easing of regulations just mentioned.

RB
Ralphie Barlow @ralphiebarlow Jul 10

Shouldn't the fear of deflation be in China? After all, it means problems for their companies. I read something about it this morning, and they say companies may have lower sales, worse results and so on.

NG
Nikolas Gabriels @nikgab Jul 10

I've encountered this a few times too, for all I know it could be a difference in macroeconomic conditions of the country or time lags between markets. I.e. stock exchange A may reflect new information faster than stock exchange B.

RB
Ralphie Barlow @ralphiebarlow Jul 10

I'd say in this case it may just be the macro. I read this morning that they are worried about deflation, but again the question is how China will handle it. Will it pump more money in?