Another Alibaba Pop for the China Internet ETF

ETF Trends

Shares of the KraneShares CSI China Internet Fund (KWEB) are higher by 1.6% Wednesday on news that Chinese e-commerce giant Alibaba could become a public much sooner than previously expected.

Previous speculation that Alibaba would price its IPO on August 8 “because the number eight is considered fortuitous in the Chinese culture,” is inaccurate, report Charlie Gasparino and Julie VerHage for FOX Business.

IPOs cannot price on Fridays because U.S. markets are closed over the weekend. KWEB could be among the first ETFs to add Alibaba to its lineup as the fund’s underlying index could add the stock after its eleventh trading day. [These ETFs Will Get Some Alibaba]

Shares of the Renaissance IPO ETF (IPO) are down 0.2%, though that ETF could add Alibaba after the stock’s fifth trading day.

News of an earlier-than-expected Alibaba IPO comes as KWEB is in the midst of a significant rebound following harsh punishment during the March/April momentum sell-off. KWEB is standing out among China ETFs Wednesday as most of the other large China and emerging markets ETFs are trading modestly lower.

When accounting for Wednesday’s gain, KWEB is up 7% over the past month, a run that has been buoyed improved sentiment toward Chinese Internet IPOs.

Retail site JD.com (JD) raised $1.78 billion in May while social media firm Weibo (WB) raised $285.6 million in April, according to Bloomberg. Shares of Weibo are up almost 7% in the past month while JD.com has surged 36% since its May 22 nd IPO. Beauty products retailer Jumei International (JMEI) is up 65 since its May 16 th IPO. [China Internet ETF Rebounds Before Alibaba IPO]

Alibaba must still pick an exchange for its U.S. listing. Fox Business previously reported “Nasdaq chief Bob Greifeld and New York Stock Exchange chief Duncan Niederauer met with Alibaba officials late last month in a last-minute push to win the coveted assignment,” according to the piece by Gasparino and VerHage.

As ETF Trends was the first to report, NASDAQ OMX could have an advantage in landing the Alibaba IPO. With Alibaba opting for a U.S. listing, the only avenue investors on China’s mainland will have to access the stock is through a product such as the PowerShares QQQ (QQQ) , which allows for the inclusion of foreign companies. The S&P 500 does not include foreign firms. [Nasdaq has Advantages in Landing Alibaba IPO]

There is a China-listed equivalent of QQQ. If Alibaba lists in the U.S. and on the Nasdaq, the only way investors in mainland China will be able to access the stock is through Guotai NASDAQ-100 Exchange Traded Fund, which launched last year on the Shanghai Stock Exchange. [New ETF Gives Chinese Investors Access to NASDAQ-100]

KraneShares CSI China Internet Fund

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