(Updates share price, adds analyst comment)
By Kiyoshi Takenaka and Ankur Banerjee
TOKYO, April 13 (Reuters) - Japanese technology investor
SoftBank Group Corp has moved to sell almost all of its
remaining shares in Alibaba Group Holding Ltd , the Financial Times reported, sending the Chinese
e-commerce giant's Hong Kong-listed shares lower.
The sale would come as valuations of China's big tech firms
have started recovering this year after an end to two years of
heightened regulatory scrutiny, providing a window for long-time
investors such as SoftBank to reduce exposure to an economy
battered by strict pandemic policies and Sino-U.S. tension.
SoftBank's share price closed down 1% on Thursday, versus a
0.3% rise in the broader market . Alibaba, one of the
most valuable assets in SoftBank's portfolio, tumbled as much as
5.2% in Hong Kong and closed down about 2%.
Tencent Holdings Ltd's shares plunged on Wednesday
after the social media giant's top shareholder Prosus NV said it may sell more of its shares, underscoring
selling pressure on Chinese tech names.
SoftBank has been seeking ways to monetise its stake in
Alibaba, which the Japanese conglomerate bought into more than
two decades ago by spending just $20 million.
"They have been clear that ... they need to monetise
profitable holdings," Jon Withaar, head of Asia special
situations at Pictet Asset Management, said of SoftBank.
"Perhaps some expected that they may slow the pace of their
selling in now that their Arm IPO is moving closer to
completion, but ultimately everything they are doing is within
the scope of what they have told the market."
Neither SoftBank nor Alibaba responded to Reuters' requests
for comment.
SoftBank aims to list British chip designer Arm this year in
an initial public offering (IPO) that would raise at least $8
billion, people familiar with the deal told Reuters last month.
On Wednesday, the FT said forward sales based on filings at
the U.S. Securities and Exchange Commission showed SoftBank's
Alibaba stake would eventually fall to 3.8% from almost 15%.
"The positions were already hedged when forward contracts
were signed, so there is no more impact on public market,"
86Research analyst Xiaoyan Wang said.
The Japanese group, led by billionaire founder Masayoshi
Son, has sold about $7.2 billion worth of Alibaba shares this
year through prepaid forward contracts, the newspaper said.
SoftBank said the transactions reflected a shift to
"defensive mode" to address an uncertain business environment
and that it would provide details in its quarterly earnings
results announcement in May, the British newspaper reported.
"China's regulatory environment in the internet sector
turned drastically tougher in recent years, and this is SoftBank
simply responding to the changing environment, as it has already
been doing," said SBI Securities analyst Shinji Moriyuki. "It is
well within the realms of expectations that the proportion of
Chinese shares among its total investment will shrink further."
SoftBank booked a $34 billion gain last year by cutting its
Alibaba stake to 14.6% from 23.7%, as the firm sought to shore
up cash reserves amid steep losses incurred by its Vision Fund.
Vision Fund, which upended the tech world with big bets on
startups, posted a staggering 8 trillion yen ($60.45
billion)loss in calendar 2022 as market turmoil slashed
portfolio firms' valuations, prompting SoftBank to raise cash.
At the time, it also used prepaid forward contracts - a type
of derivative contract that allows investors to hedge risk.
In New York, Alibaba's shares were up 3% as analysts noted
that the stake sale was more due to SoftBank's circumstances.
Alibaba has lost more than two-thirds of its value from
highs touched in late 2020, hit by increased regulatory action
in the technology sector that included a hefty fine on Alibaba
and scrutiny of founder Jack Ma's business empire.
The Chinese firm plans to split into six units and explore
fundraisings or listings for most of them, marking the biggest
restructuring in its 24-year history.
($1 = 132.3500 yen)
(Reporting by Yuvraj Malik in Bengaluru, Ankur Banerjee in
Singapore and Kiyoshi Takenaka in Tokyo; Additional reporting by
Chavi Mehta; Writing by Miyoung Kim; Editing by Krishna Chandra
Eluri, Christopher Cushing and Shounak Dasgupta)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.