The paperless listing may have more to with logistical dangers from the HK protests rather than ESG concerns.

Alibaba is choosing to list its forthcoming IPO in Hong Kong as a backup base outside its US listing. It likely has an apprehensive view of the US-China trade wars and is, therefore, seeking continuity in the trading of its shares in another global financial center. Therefore, the moniker “escape valve listing.” Moreover, there have been media reports about the Trump administration considering a ceiling on how much of Chinese stocks US government pensions could buy. Further, the Alibaba IPO will be paperless.

Can’t risk queues of investors in a physical IPO

Given the deteriorating situation in Hong Kong due to ongoing anti-government protests, Alibaba is understandably not going the traditional, physical route to market a Hong Kong IPO. That involved printed prospectuses and share applications through paper forms to be filled up manually by retail investors. Long queues in collecting banks are common, but certainly not advisable in Hong Kong’s current politically charged environment.

That may be a strategically sound decision given the size of Alibaba’s issue. It plans to issue 500 million new shares and raise up to $13.4 billion. Retail investors will get a chance to apply for 2.5% of this issue, or 12.5 million shares, on Friday.

Paperless a break from HK tradition

The company lodged a 661-page prospectus with the Hong Kong Stock Exchange on Wednesday. An unnamed source told Reuters that the company would not print any physical copies of the prospectus.

Alibaba’s IPO will be the first paperless IPO to float in Hong Kong.

To be fair, Alibaba’s decision may also have to do with its stature as a hi-tech, digital online e-commerce organization. Equally, there may be environmental, social, and governance (ESG) considerations behind it.

Jack Ma warns of trade turbulence

Jack Ma, the co-founder and former chairman of Alibaba Group Holding Ltd., warned today the U.S.-China relationship could face 20 years of “turbulence” if the two giants are unable to sort out trade issues amicably.

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