Investors making room for Alibaba debut

SAN FRANCISCO/NEW YORK: Investors are looking over portfolios to make room for Chinese e-commerce giant Alibaba Group Holdings Inc’s market debut next month — and that means some less attractive stocks that funds are holding may be shown the door.

The initial public offering (IPO), which could top US$16 billion (RM50.56 billion) to become the largest-ever IPO by a technology company, is expected as early as next month after Alibaba management kicks off a two-week investor road show after the Labour Day weekend.

As investors take a hard look at their portfolios, it may trigger a veritable garage sale of names that are failing to impress Wall Street, including United States e-commerce rival Inc, fund managers said.

“Any company that didn’t meet expectations and give a rosy outlook is probably being considered as a sale candidate to make room for a name like this,” said Jim O’Donnell, chief investment officer of Forward Securities, which has US$5 billion in assets under management.

“There won’t be wholesale turn-overs of portfolios, but I imagine Amazon is being looked at,” he added.

Chinese rivals like Baidu Inc and Tencent Holdings Ltd also may be pressured as well if fund managers view Alibaba, which powers 80 per cent of all online commerce in China, as a better path to tap growth in the world’s second-largest economy. Reuters