Alibaba joins share-sale frenzy with offering for pictures unit

[HONG KONG] Count billionaire Jack Ma's Alibaba Pictures Group Ltd among the growing number of companies in the Greater China region seeking to raise money through the stock market to take advantage of surging prices.

The unit of Alibaba Group Holding Ltd on Thursday said it plans to raise HK$12.2 billion (S$2.15 billion) by selling new shares in Hong Kong to help finance potential acquisitions.

The sale of 4.2 billion shares will increase the number of outstanding by 20 per cent - diluting existing ones - leading the shares to fall as much as 11 per cent in early Hong Kong trading today.

Alibaba's offering adds to the US$21.9 billion raised through share sales, excluding IPOs, in Hong Kong this year. In mainland China, the stock-market rally has spurred a frenzy of share sales with more than 380 companies announcing deals exceeding US$130 billion in 2015.

It's been a particularly lucrative year for holders of the the movie company. Alibaba Pictures had surged more than 160 per cent this year before today, making it the fifth-best performer on the Hang Seng Composite Index.

Separately, electric-carmaker BYD Co said on Wednesday that it plans to raise as much as 15 billion yuan (S$3.23 billion) selling new shares in China.

Other companies that have announced share sales this week in China and Hong Kong include Kingsoft Corp, Zhongrun Resources Investment Corp and CPT Technology Group Co.

And those exclude initial public offerings, a market that's just as hot if not hotter. For example, China National Nuclear Power Co.'s plan to raise US$2 billion drew total bids for an amount almost equaling the entire annual economic output of Hong Kong.

BLOOMBERG