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Alibaba Blocked From Hong Kong Stock Connect Program

Alibaba cannot be included in a stock connect program that allows mainland Chinese investors to buy shares in Hong Kong, a report says.
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Chinese e-commerce titan Alibaba Group Holding (BABA) - Get Free Report cannot be included in a stock connect program that allows mainland Chinese investors to buy shares in Hong Kong, according to a report.

The exclusion of companies with secondary listings and weighted voting rights from the program was part of an arrangement agreed to by the mainland and Hong Kong exchanges before Alibaba’s Hong Kong debut last year, Bloomberg reported, citing people familiar with the matter.

The Shanghai, Shenzhen and Hong Kong exchanges haven’t agreed to make an exception or revise the agreement for Alibaba, though that could change in the future, Bloomberg said.

The Hong Kong Stock Exchanges & Clearing Ltd. has proposed changes to the China Securities Regulatory Commission, which hasn’t yet made a decision to revise the previous arrangement.

Allowing companies such as Alibaba into the program would run contrary to
Beijing’s ambitions of developing its mainland exchanges, particularly in light of the unrest in Hong Kong.

Alibaba isn't among the current batch of companies to be included in the stock connect, Bloomberg said. The list will be updated on Feb. 17.

Separately, Alibaba is rolling out relief packages for online merchants affected by the coronavirus outbreak, the South China Morning Post reported.

All online stores operating on its flagship Tmall will be exempt from service fees for the first half of the year, while all stores on Tmall and will be able to use an essential online tool kit to revamp their online storefronts free of charge, the company said in a statement.

Alibaba, which owns the "South China Morning Post," will also waive two months’ rent for new users of its Cainiao logistics networks.

The Chinese government said that by the end of Monday, 1,016 people had officially died from the coronavirus with 42,638 infected.

Alibaba, China's largest e-commerce company, is scheduled to report quarterly earnings on Thursday. Wall Street is expecting the company to report earnings of $2.25 a share on $22.68 billion in revenue.