Alibaba’s profitability and overall ability to justify the ebullience surrounding its IPO are also pivotal for KWEB because the ETF could be one of the first, if not the first, to add the stock to its lineup. The CSI China Overseas Internet Index, KWEB’s underlying index, has the ability to add Alibaba after the stock’s eleventh trading day. [ETFs for the Next Batch of China Internet IPOs]
Alibaba could raise as much as $15 billion at a valuation north of $150 billion. That market value is nearly triple Baidu’s current market cap and almost 15 times that of Qihoo 360 (NasdaqGS: QIHU), KWEB’s second-largest holding.
“Analysts believe the rising profit margins suggests Alibaba is benefiting from so-called ‘network effects’ as more merchants and more consumers are drawn to the online marketplace it has already built. Due in part to China not having as many brick and mortar retail options for consumers as strip-mall saturated America, a factor that bodes well for the continued growth of Alibaba’s business,” said Ahern. [Overlooked China ETF Soars]
KraneShares CSI China Internet Fund
