Hi Neil, thanks for sharing the possible scenarios with the group.
Is it possible to transfer shares to a new broker if they are wrapped in an ISA?
As far as I know stocks within ISA have to be sold prior to transferring it to a new broker.
Does it mean that if the share price keeps dropping and the stock gets delisted I will be forced to sell with loss?
Thanks for raising this. Weāre looking closely at the latest developments around the potential delisting of certain ADRs from China. If the delisting goes ahead, weāll need to check with our custodian about how trading will be impacted. Weāll keep you posted as we know more.
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The issue with BABA and most chinese companies in sensitive industries isnāt whether they are on original exchanges but whether there is permission for foreigners to own their stock.
Because BABA owns sensitive tech, the only permissible structure was for the company to be owned by Chinese investors. To side step regulations and raise capital outside China, BABA used a variable interest entity (VIE) structure where foreign investors can own a share of its profit.
Does this mean that BABA stock on the US stock market is less legitimate than stock on the HK stock market? No, theyāre both equally challenged since if you look through foreign investors are not permitted to hold BABA in the very conservative application of Chinese law. Stock issued on HKEX is just as bad.
TLDR, I donāt think thereās a original exchange for stock in Alibaba, as they are most likely held by Jack Ma and his cabal of Chinese fellow shareholders. All other shares issued in US and HK are direct or indirect stock in the VIE, which is viewed as illegal by China regulators.
To read up more on VIE, follow this link: Explainer: How Chinese clampdown will target offshore listings | Reuters
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Best thing here is to hold fire, if youāre planning to hold for the Long haul then wait and see what the Freetrade team come back with.
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Lots of different sources claim this to be a massive over reaction - similar to the article I posted above. They are not after companies like Alibaba, it was initially about education and healthcare companies. Could be wrong, but I wouldnāt panic just yet. Keeping emotion out of the game is the hardest thing to do when you see stocks slipping so heavily.
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Agreed, I think thereās a lot of irrationality around it and Chinese securities generally. I donāt think Iāve seen so much negative sentiment, even during the Trump ātrade warā cycles. Sure it could still go to zero, but itās being priced as of thatās a very high probability rather than a slight possibility.
So I finally took a small position (beyond the token 1 share Iāve had for ages). Big shout out to Compliance on this one, I saved ~Ā£200 because the price continued to fall while I waited for approval.
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Yes, thatās my view too. Itās totally overblown. I think its human nature to be filled with despondency and gloom when the market is hitting an all-time low every day.
China has slapped fines on huge industries and started bringing in much-needed regulations. Didi was delisted precisely because they violated an express prohibition by the Chinese regulators. They possess huge confidential data relating to Chinese addresses and locations. The EU has a similar policy with whatsapp. Information and data is run through EU servers. Alibaba has authorised a huge buyback of their ADRs, and their finanicals are audited by PwC. Moreover, on reddit, I saw some update from Chinaās official regulators that they donāt intend to delist Chinese companies or return the state to its halcyon agrarian history.
I havenāt seen any regulations that have struck me as deeply irrational or capricious.
Up 7% so far today, starting strong 
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This is as a result of management restructuring? Iāve only read the headlines.
Yes thereās huge wealth inequality but nothing like 20 years ago. Right now there are more Chinese citizens classified as middle class than there are people in the United States. Obviously thereās a huge way to go but its changed dramatically the landscape in China.
Thank you. Could you also check with your custodian how this would reflect on those that hold Baba within an ISA wrapper please as well.
Thanks for asking, Iāve forwarded your question on so we can look into it.
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Iāve seen that youāve added Finnish stocks to Freetrade. Is there any chance we can have access to the Hong Kong Stocks Exchange in the future? We can then convert our ADRs this way. Any thoughts on that?
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Different views
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Iām not convinced by the second article.
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I think that you are on to something here. Looking at BABA outside the context of Chinese politics and in particular ālosing faceā is a mistake. I think that any company that doesnāt make moves to fit in with the recent cultural and economics announcements by the leadership is going to have a hard time.
Growth in China will continue is a foregone conclusion. Where and how is not - the Chinese leadership will decide that.
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Thanks, @bitflip for reminding, I meant to add some more detail forgot.
Right now Xi would probably be 3rd on the list of great modern Chinese leaders behind Mao & Xiaopeng. To break the top 2 he needs something substantial to cement his reputation. He can now do this after he shored up his position as president for almost as long as he wants.
1 - Mao - Founding father of the Peopleās Republic of China and as close to a saint as youāll get in a secular country.
2 - Xiaopeng - Called Architect of Modern China, when he reformed the worst elements of Maoism he set in motion China and lifted hundreds of millions out of poverty.
Why are these two important? They both left their mark in the history books, which is what Xi wants to do. Heād love to reunite (as he sees it) Taiwan but knows this would lead to a messy conflict with the west so he needs to look elsewhere.
Xiaopeng lifting hundreds of millions out of poverty was an incredible feat but it has also created massive income inequity and corruption, these do not fit the communist ideals.
Knee capping tech companies, banning for-profit education & limiting children screen time are all opening moves in a concerted effort to close this wealth inequality.
Iām not saying BABA is doomed or saying that itāll spring back but with CCP officials on the board and every aspect of its business under the microscope, it faces substantial headwinds. The Chinese plan in generations, not quarters, anyone holding BABA better is doing the same.
Caveats - just my opinion - not investment advice-
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@NeilB excellent points. I hope that others read your comments and think carefully. It is all about doing oneās research. I have had the pleasure of going to and working in China, on business, on several occasions and I certainly would never underestimate the capacity of China and Chinese people to achieve great things. It is an amazing place - things get torn down quickly and rebuilt when it is believed that is the right thing to do. Even the western brand hotel that I stayed at in Beijing was knocked down and rebuilt between the two of the visits that I made there.
I think it is fantastic that you took the time to read about China and some Chinese leaders. In particular taking Xiaoping into consideration. I have started reading this book:
but am afraid I have not had the time to complete it. New Yearās resolutions are around the corner so I guess one spot is now taken 
The fact that the present leadership intends to make a great and everlasting positive change to millions more in China is a good thing. Whether BABA and similar companies fit with that goal is up in the air. There are other aspects of this: western Fashion brands that have been targeted for ādisrespecting Chinese sovereigntyā know only too well.
Like you, I am not taking a position on BABA one way or the other - I donāt understand enough and so this is an impossible call for me. Perhaps the simplest, but still risk soaked way of investing there, is via a fund of some description. People interested in China need to take a long view and be prepared to understand that everything can be torn down and built into something different in a flash.
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