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Alibaba rises on reports China could ease stock ownership rules

Alibaba (BABA) shares are up in late trading as the Chinese government considers easing stock restrictions on foreign ownership of domestic publicly traded companies, according to a report from Bloomberg.

Yahoo Finance Live discusses the news. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video transcript

AKIKO FUJITA: All right, let's move on to another ticker we're watching today. Alibaba shares rise as the Chinese government reportedly looks to relax restrictions on foreign ownership of domestic publicly traded companies. Bloomberg reports China is aiming to lure global funds back to its stock market with those changes.

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Now, specifically as the numbers stand, total foreign ownership right now is capped at 30%. Single foreign shareholders are limited to a 10% limit. Bloomberg not necessarily reporting where it's going to be moving. But this comes at a time when we have seen a lot of capital leaving China because there are concerns about just how investable the market is.

There's also concerns about the macro environment. So this could be certainly positive for the companies. But you have to wonder, Josh, if you are a foreign investor, are you willing to go back into China? Is the opportunity still that big right now in this environment?

JOSH LIPTON: Yeah, and I think you bring up the key points, Akiko. One is obviously we were expecting-- a lot of people expecting this kinda post-COVID boom in Beijing. That hasn't happened. It's weak. So I do think you see the Chinese authorities kinda pulling different levers. With this one though, as you also point out, relaxing those restrictions, we'll see what the reaction is. But just because you build it doesn't mean they come, right?

AKIKO FUJITA: Well, and we heard commerce secretary Raimondo on her recent visit-- I keep bringing this up because I think it's significant-- who said, look, I'm speaking to American businesses who say China is uninvestable. You know, is that the case? Something to watch.

JOSH LIPTON: Yeah, absolutely.