China’s big IPO could trigger U.S. stock market sell-off
The U.K. has agreed to buy shares of Alibaba Group Holding Ltd., which will be China’s biggest IPO since its 2008 founding.
The deal, which could raise $4 billion for Alibaba and other Chinese companies, is expected to close in the coming days, according to people familiar with the matter.
It is the latest in a series of moves by China to strengthen its hold on its market capitalization, which has been rising since it overtook the U.E. as the world’s No. 1 exporter in 2016.
It also could provide a boost to the Dow Jones Industrial Average, which fell more than 1% on Tuesday amid concerns about the China deal.
The Chinese-backed company is expected in 2018 to become the biggest private company in China, with a market value of $11.3 billion.
It is backed by the China Securities Regulatory Commission and the China Investment Corporation, a private-equity firm.
Its chief executive, Caijing Capital Partners, is a former billionaire of Hong Kong and the founder of the Chinese e-commerce giant Alibaba Group.
China’s government has pushed to become a more globalizing economy.
In 2018, it said it planned to open a Chinese-owned $5 trillion sovereign wealth fund and an investment fund to invest in emerging markets.
Last week, China’s central bank warned against any market intervention that could undermine confidence in the yuan, which is the world reserve currency.