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Investors Business Daily
Technology
BRIAN DEAGON

Alibaba Keeps Climbing As It Gets More Good News From China Regulators

Alibaba and other China stocks received good news Monday as top government officials said a two-year regulatory clampdown on the nation's internet companies was ending. BABA stock climbed.

The ending of the clampdown on the internet sector comes as billionaire Jack Ma agreed to cede controlling rights of Ant, a financial technology giant. Ant is an affiliate of e-commerce giant Alibaba.

In 2020, the planned $37 billion initial public offering of Ant was canceled by government officials, marking the start of a sweeping crackdown on the China internet sector. The IPO would have been one of the largest ever.

BABA stock jumped 3.2%, closing at 110.83 on the stock market today. Other China stocks initially popped, then pulled back.

"We see early signs of an easing regulatory environment with the government's support for the private sector," BABA stock analyst Gary Yu of Morgan Stanley wrote in a note to clients. "For the past 1-2 years, Alibaba has been in focus, so we think it could outperform other Chinese Internet stocks as the environment eases."

BABA Stock: Officials Supporting Top Companies

China officials said they also plan to support private sectors, singling out internet platform firms. The government also will support companies that play a leading role in economic development. The idea is to create jobs and compete in the international market.

Last week, China regulators approved a plan that allows Ant Group to raise $1.5 billion for the company's consumer finance unit.

Also benefiting China stocks is an easing of Covid policies, following three years of restrictions. That included the ending of citywide lockdowns and restrictions on some of the country's massive manufacturing plants.

BABA stock has an IBD Composite Rating of 81.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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