BEIJING, March 22 (TMTPOST)—The U.S.-listed shares and the Hong Kong-listed ones of Alibaba Group each soared more than 11% on Tuesday after the Chinese e-commerce giant announced an updated massive buyback program.

Source: Visual China

Alibaba’s board has authorized to upsize its share repurchase program to US$25 billion, effective for a two-year period through March, 2024. This is the company’s second upscale for the buyback program originally unveiled in December, 2020.

As of March 18, 2022, Alibaba had purchased a total of 56.2 million American depositary shares (ADSs) worth of US$ 9.2 billion under the previously announced share repurchase program in last August, which hiked the size by US$5 billion to US$15 billion. Increasing the size by 60%, the latest updated program is set to be the largest buyback for a Chinese firm listed outside the mainland China. The repurchase size accounts for about 8.97% of Alibaba’s market capitalization as of the close on Monday.

Later Tuesday, another Chinese internet giant Xiaomi also said it will launch a major buyback. Its Board formally resolved to repurchase shares in the Hong Kong open market from time to time at a maximum aggregate price of HK$10 billion, according to the announcement.  Similar to Alibaba, Xiaomi’s board also believes the repurchase will demonstrate confidence in its own business outlook. Xiaomi’s Hong Kong shares settled more than 6% higher that day.

The two companies’ move came as a key State Council meeting chaired by China's Vice Premier Liu He last Wednesday signaled future boost to economy and positive attitude to platform economy. The meeting urged authorities to unveil market-friendly policies and caution on tightening policies. It also sought to address concerns over online platforms as it said the governance of the platform economy shall pursue steady progress through improved plans under principles of market orientation, rule of law and internationalization. It requires authorities to proceed with the rectification of major platforms in a stable manner, facilitate stable and healthy development of the platform economy, and improve their global competitiveness. 

China encourages financial innovation while requires strict compliance with laws and regulations to facilitate fair competition and prevent disorderly capital expansion, said Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission (CBIRC) in the beginning of this month. Guo noted Alibaba’s fintech unit Ant Group still has some issues to be resolved during its rectification since its dual listing Shanghai and Hong Kong halted in November, 2020.

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