Will it work? Two problems do not make the solution. Alibaba, the e-commerce giant forced by the Beijing authorities to a radical corporate transformation and with its icon Jack Ma disappeared from the public scene, should revive the fortunes of Suning, another giant on the verge of bankruptcy and with its own charismatic founder Zhang Jingdong sentenced by a Beijing court to freeze shares for three years. Marriage is all uphill. For the moment, the equally problematic Chinese local bond circuit is gaining from the announcement effect.
Alibaba-Suning, speculation does business
For the moment, Suning Holdings Group Co.’s local bond market prices have skyrocketed. A circuit with a very high risk of default, as the Beijing authorities know very well that they keep the headlights firmly on the trend of municipal bonds always at high systemic risk.
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The announcement that Alibaba could be the white knight capable of saving the indebted group of Jangsu, the main shareholder of Inter, from the abyss, has set fire to the dust of speculation. The intervention would be in consortium (previously there was talk of an intervention on its own, by a fund of the local municipality, but the move was not followed up) with the government of Shenzhen.
Alibaba would enter the retail component of Suning, born as a chain of products for the home with over 1,600 points of sale throughout the country, a brand much loved by Chinese families and then converted to e-commerce and beyond. Over time, Suning has become an endless holding company with interests in fields very far from its original activity.
Suning’s prices have skyrocketed, especially those of the Suning.com e-commerce platform which gained 1.9% to 99.31 yuan, hitting the highest level since August last year.