Could someone explain one thing to me?
Shares of Alibaba Group and Tencent in Hong Kong strengthened on Monday following the $984 million fine against Ant Group, founded by Jack Ma (Alibaba $BABA+0.5%). This could signal the end of regulatory crackdowns against the country's tech sector.
Alibaba
BABACapital Structure
Market Cap
162.9B
Enterpr. Val.
1.1T
Valuation
P/E
16.7
P/S
1.3
Overall, this is positive news, which is why it's striking that BABA is +3.2% on the HKG exchange but negative in premarket trading on the NYSE. How can the same company's performance be different on two different exchanges and after more or less good news?
Shouldn't this be settled by arbitration?
As has already been said, there may be several reasons - macro, different demand, time lags and exchange rate differences.
This is most likely due to the fact that investors from other countries who invest in ADRs are putting more weight on economic data - they fear possible deflation. In contrast, investors in 9988.HK are more likely to see the possible easing of regulations just mentioned.
I've encountered this a few times too, for all I know it could be a difference in macroeconomic conditions of the country or time lags between markets. I.e. stock exchange A may reflect new information faster than stock exchange B.