According to the Financial Times, Japanese technology investor SoftBank Group Corp (9984.T) decided to sell almost all of its remaining shares in Alibaba Group Holding Ltd (9988.HK), sending the stock of the Chinese e-commerce giant down.
The sale would take place as big tech valuations in China have begun to recover this year following the end of two years of increased regulatory scrutiny, giving long-term investors like SoftBank an opportunity to lessen their exposure to an economy that has been severely harmed by strict pandemic policies and Sino-U.S. tension.
Following the broader market’s (.N225) little change on Thursday was the share price of SoftBank. Alibaba, one of SoftBank’s most valued investments, fell as much as 5.2% in Hong Kong on the story before narrowing the loss to 2.8%.
That came after Tencent Holdings Ltd (0700.HK) fell 5.2% on Wednesday after its largest shareholder, Prosus NV (PRX.AS) of the Netherlands, said it may sell further shares, highlighting the selling pressure on Chinese tech giants.
The Japanese giant SoftBank has been looking for ways to cash in on its share in Alibaba, which it invested just $20 million in more than 20 years ago.
According to Jon Withaar, head of Asia special circumstances at Pictet Asset Management, “They (SoftBank) have been clear that… they need to monetise profitable holdings.”
“Perhaps some anticipated that they might slow down their selling in (Alibaba) now that their Arm IPO is nearing completion, but ultimately everything they are doing is within the bounds of what they have disclosed to the market,” the statement continued.