Alibaba Leads Rally in US-Listed China Stocks on Ant Capital Nod

(Bloomberg) — Alibaba Group Holding Ltd. led an advance in US-listed Chinese stocks in premarket trading, with Ant Group Co.’s approved fundraising plan boosting optimism that China’s regulatory clampdown on its internet sector is easing.

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Alibaba, which owns a stake in Ant, rallied 6.7%. Its e-commerce peers JD.com Inc. and Pinduoduo Inc. both traded up more than 4.5%.

Chinese stocks have rallied at the start of the year on bets that the nation’s reopening will eventually boost the economy and corporate profits despite initial disruptions. The exchange-traded KraneShares CSI China Internet Fund pointed to a second day of gains, rising 4.5% before the bell.

Regulators approved a plan by Jack Ma’s Ant to raise 10.5 billion yuan ($1.5 billion) for its consumer unit, removing a hurdle before the fintech giant restarts its initial public offering shelved in 2020. The news pointed to warmer ties between Chinese authorities and the country’s biggest tech firms, as officials placed economic growth as a top priority.

Adding to the optimism is further potential policy support to the housing sector, a key weak spot in China’s Covid-hit economy. Beijing is planning to help shore up balance sheets of some developers it deemed as “systemically important,” according to a Bloomberg report. Authorities also resumed approvals for private equity funds to raise money for residential property developments.

With Wednesday’s advance, the Hang Seng China Enterprises Index, a gauge tracking major Hong Kong-listed Chinese stocks, closed at its highest level since July. A pickup in mobility in some major cities has given hope that Covid caseload may have peaked, after the highly infectious virus pushed the country’s economic activity to the slowest pace since February 2020.