HONG KONG (Reuters) – Alibaba Group’s $13.4 billion Hong Kong listing is shrinking cash levels in the protest-wracked financial hub, with short-term borrowing costs shooting back towards a decade-high marked in July. FILE PHOTO: A Hong Kong dollar note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo Large IPOs and share sales typically hoover up cash in Hong Kong’s relatively small banking system, albeit temporarily. But market players say Alibaba’s listing is having a much bigger impact, due to its blockbuster size and as five months of pro-democracy protests have resulted in recession and sown fears of capital outflows. “Timing wise, it’s not good for the liquidity to get sucked out of the system as there’s a bit of capital outflow happening due to the protests,” said a Hong Kong-based senior banker at a European bank, who asked not to be identified. The one-month Hong Kong Interbank Offered Rate (HIBOR) has rocketed 100 basis points this week to hit 2.75% on Thursday, not too far off a decade-high of 2.99% marked in July when protestors occupied the city’s legislature. On Friday, the rate edged back to 2.71% Those levels are much higher than other previous big… Read full this story
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