Alibaba shares surged 16% on hopes that the Chinese tech giant's restructuring means Beijing's tech crackdown is finally ending
in late 2020. At the time, Ma had angered Beijing with a speech criticizing China's financial regulatory system.
Ma's return was seen as a signal that Beijing may be taking a friendlier stance toward private enterprises and is ready to end the regulatory scrutiny on powerful big tech companies. "Baba's breakup may be an important experiment," Bank of America analysts wrote in a Tuesday note seen by Insider, referring to Alibaba's stock symbol on the New York Stock Exchange. As China has"always required its biggest sectors and firms to 'contribute to the society,'" Alibaba's split could address various concerns including anti-trust and policy risks, the bank suggested.
Alibaba itself could also be seeking more lenient regulatory oversight with the split, wrote Oshadhi Kumarasiri, an equity research analyst at LightStream Research. "This could potentially allow each entity to operate under a more manageable regulatory framework, rather than having one large entity that may be subject to more stringent regulations," Kumarasiri wrote in a The separation of business units also limits the impact of unit-specific factors to the entire group, Shawn Yang, the deputy research head at Hong Kong-based Blue Lotus Research Institute, wrote in aAlibaba shares on the New York Stock Exchange were down 1.1% in pre-market trade.
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