Alibaba's Hong Kong shares slump 10% as it scraps cloud business spin-off

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Alibaba Group's Hong Kong shares slumped 10% today after it scrapped plans to spin off its cloud business, citing uncertainties fuelled by US curbs on exports to China of semiconductors used in artificial intelligence applications.

Alibaba Group's Hong Kong shares slumped 10% today after it scrapped plans to spin off its cloud business, citing uncertainties fuelled by US curbs on exports to China of semiconductors used in artificial intelligence applications. The drop, potentially its biggest one-day fall in more than a year, wiped about $20 billion off the Chinese tech giant's market value.

It was the first market reaction in Asia since the stunning strategy reversal was announced last night, after which the company's US listed securities closed down 9%. "The shelving is a surprise and makes us wonder if there are issues behind the scenes that we aren't aware of," said Jon Withaar, the Singapore-based head of Asia special situations at Pictet Asset Management. Alibaba's concerns over the US export curbs announced by Washington in October come on the heels of similar worries raised this week by Chinese social media and gaming company Tencent Holdings, which said the restrictions would force it to seek domestically produced alternative

 

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