In this Sept 16, 2019 photo, sculptures of water buffaloes stand outside the Exchange Square complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China. (PHOTO / BLOOMBERG)

HONG KONG - Hong Kong Exchanges & Clearing Ltd surged 9.8 percent, its biggest jump in five years, after billionaire Jack Ma’s Ant Group announced plans to seek a dual listing in Hong Kong and Shanghai, bypassing New York.

Ant Group is seeking a valuation of more than US$200 billion as it goes public, and could raise more than Saudi Aramco’s record US$29 billion if market conditions are favorable, according to a person familiar with the matter

Ant Group is seeking a valuation of more than US$200 billion as it goes public, and could raise more than Saudi Aramco’s record US$29 billion if market conditions are favorable, according to a person familiar with the matter. The Hong Kong portion could raise about US$10 billion, according to people familiar with the matter, which would make it the sixth-largest initial public offering in the city.

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The listing is a boost to exchanges in Hong Kong and Shanghai, while dealing a blow to US bourses as more firms from the Chinese mainland look to raise money. Hong Kong-listed Semiconductor Manufacturing International Corp raised US$7.5 billion from a Shanghai share sale in July, while the Chinese mainland internet firms JD.com Inc and NetEase Inc added secondary listings in Hong Kong this year.

Ant’s IPO is also a major lift for the city of Hong Kong, which is facing mounting challenges from a sharp recession. 

“Ant Group’s listing in Hong Kong will be a vote of confidence in the city,” according to Bruce Pang, head of macro research at China Renaissance Securities Hong Kong.

Hong Kong Exchange Chief Executive Officer Charles Li said Ant Group’s “intention to IPO in Hong Kong, as well as in their home market, affirms Hong Kong’s role as the world’s leading international IPO market.”

Index company Hang Seng Indexes Co also announced plans to launch a new technology index effective July 27. Citigroup Inc said in a research note that the index will attract investors to local tech shares and facilitate index-linked funds and derivatives, while attracting more high-quality tech companies from the Chinese mainland to the special administrative region.

Hong Kong Exchanges rose 9.8 percent a record HK$380.00 at close. The stock has surged 48 percent this year, the second-best performer on the Hang Seng Index, which has dropped 9.4 percent in 2020.

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The benchmark Hang Seng Index closed up 577.67 points, or 2.31 percent, to 25,635.66 points on Tuesday. Turnover totaled HK$161.71 billion (about US$20.87 billion).

With Xinhua inputs