Alibaba's Hong Kong shares surged 5% on reports of Ma buying stock

Alibaba Group (NYSE:BABA) shares in Hong Kong rose on Wednesday, matching a rise in their American counterparts after allegations surfaced that co-founders Jack Ma and Joe Tsai were buying stock in the e-commerce behemoth.

Alibaba's HK shares (HK:9988) rose 5.5% to HK$71.30 by 21:20 ET, outperforming the Hang Seng index, which gained 1.5%. The firm's American Depository Receipts increased by roughly 8% overnight.

Wednesday's rise also saw Alibaba's Hong Kong shares recover from a 15-month low.

According to the New York Times, Ma purchased $50 million in Hong Kong shares during the fourth quarter, while Tsai purchased over $151 million in US shares through his Blue Pool Management business.

Ma stepped down as executive chairman in 2019, yet he still owned a significant interest in Alibaba. Tsai is the current chairman of the e-commerce firm, succeeding Daniel Zhang in 2023.

Ma surrendered control of Alibaba's fintech affiliate Ant Group in 2023, following a failed attempt to IPO the company. He had also virtually disappeared from the public eye since 2020, as China's largest technological giants faced a growing government crackdown.

Tuesday's report boosted confidence in Alibaba, which had suffered a significant drop in value over the previous year as plans for a six-way split failed. The e-commerce behemoth was also facing stiffer competition in its home market from PDD Holdings (NASDAQ:PDD), as consumer spending in China failed to recover significantly from COVID-era lows.

The company has also recently expressed concern about the difficulty of achieving its artificial intelligence goals due to a lack of access to cutting-edge semiconductor technology as a result of US trade sanctions against China.

Nonetheless, other analysts suggest that Alibaba's present low valuations make the stock suitable for bargain hunting, noting a strong basis and the ability to benefit significantly from a Chinese economic recovery.

Alibaba gains boost Hong Kong's tech sector

Alibaba's gains spilled over to other key Hong Kong technology stocks. Baidu Inc (HK:9888) (NASDAQ:BIDU), a search engine behemoth, surged 4.8% in Hong Kong trade, while Tencent Holdings Ltd (HK:0700), part of the BAT (LON:BATS) trio with Baidu and Alibaba, increased 2.1%.

NetEase (NASDAQ:NTES) Inc (HK:9999) increased 4.9%, while Meituan (HK:3690) grew 3.3%.

Major Hong Kong technology equities have suffered significant losses over the last year, as China's post-COVID economic rebound has largely failed to materialize.

Bloomberg reported that the Chinese government was drafting a major 2 trillion yuan ($278 billion) stimulus package for domestic stocks, which boosted overall attitude towards Chinese markets.