SoftBank shares jump on Alibaba split-up plans
29/03/2023 06:24
TOKYO, March 29 (Reuters) - Shares in SoftBank Group
Corp 9984.T soared on Wednesday after Chinese e-commerce
conglomerate Alibaba Group 9988.HK , in which the Japanese
technology investor has a 13.7 % stake, announced a major
restructuring plan.
SoftBank shares were up 5.6% in afternoon trade, on track to
post the biggest percentage gain in five months. Alibaba shares
were up 13.2%.
Alibaba said on Tuesday it was planning to split into six
units and explore fundraising or listings for most of them, in
the biggest restructuring in its 24-year history.
SBI Securities analyst Shinji Moriyuki said the split-up
would probably prevent Chinese government scrutiny of any of
Alibaba's operations from affecting the rest of the group.
China's unprecedented regulatory crackdown in the last
couple of years on its marquee domestic companies - mainly in
the internet, private education and property sectors - wiped off
billions in market values and weighed on investor sentiment.
"Investors took heart from sense of uncertainty over Alibaba
having been eased a little ... there was a certain discount to
SoftBank's stake given the unclear direction of China's internet
sector," Moriyuki said.
Alibaba said on Tuesday it would split into six units -
Cloud Intelligence Group, Taobao Tmall Commerce Group, Local
Services Group, Cainiao Smart Logistics Group, Global Digital
Commerce Group and Digital Media and Entertainment Group.
Alibaba itself would re-organise into a holding company
structure, with Daniel Zhang retaining his position as group
CEO, and with separate CEOs and boards for each of the six
sub-divisions.
Ichiyoshi Asset Management director Mitsushige Akino said
that investors chased SoftBank higher in light of a spike in
Alibaba shares, but that it is too early to tell whether the
revamp will bring lasting growth to the Chinese company.
"I'm not sure if a 5% rise (in SoftBank shares) can be
justified. I believe buy orders, including short covering, are
being placed in response to this new factor to trade on. We just
have to wait and see how this really plays out," Akino said.
(Reporting by Kiyoshi Takenaka. Editing by Gerry Doyle)
((kiyoshi.takenaka@thomsonreuters.com; +81 3 4563 2788;))