By News18,Satyaki Baidya

Copyright news18

Foreign investors have been persistently selling from Indian stock markets, while investment in Chinese companies is seeing a resurgence. Recently, renowned American investor Cathie Wood’s fund management company, Ark Invest, has repurchased Alibaba shares for the first time in four years.
Two of Ark’s ETFs have acquired approximately US$16.3 million worth of ADRs (American Depository Receipts), investing in Alibaba’s internationally traded shares.
Ark Investment had previously made a significant investment in the Indian company HDFC Bank in 2017 but withdrew all its funds from the firm in 2021. Currently, Ark Investment does not hold shares in any Indian company.
Cathie Wood, known for her strong belief in technology and innovation, invests primarily in high-growth tech companies through Ark’s ETFs, which allow small investors to invest in tech companies. When Ark invests in a company, it is often seen as a vote of confidence in the market.
What Is An ADR And Why Investors Use It For Buying Shares?
An ADR is a form of a country’s stock that can be sold in the US, allowing US investors to purchase Alibaba’s stock through ADRs rather than directly through China or Hong Kong.
Ark Investment’s purchase of ADRs indicates that foreign, particularly US institutional investors, are returning to China’s major companies. This is notable as many foreign investors had exited in recent years due to stricter regulatory scrutiny and a slowing economy.
Alibaba is heavily focusing on artificial intelligence (AI) and cloud services, increasing spending on AI infrastructure, and transforming its cloud business into a “full-stack” AI service. The company has also ventured into instant commerce and on-demand services, creating new revenue streams. This has sparked optimism for future growth among investors.
Impact On Stocks And Market Trends
Following this development, Alibaba’s shares surged in Hong Kong, and ADRs are also trading at high levels. Large investments by prominent investors are seen as positive signs by other market participants. Additionally, the improvement in Alibaba’s cloud and on-demand businesses, as shown in its quarterly report, has bolstered investor confidence.
However, it is important to note that stocks, especially in the tech sector, are subject to constant fluctuations due to high expectations and risks. Tech companies face challenges such as regulation, intense competition, and the potential failure of new projects. Therefore, ordinary investors should exercise caution and not invest blindly based on the actions of large funds.