Alibaba founder Jack Ma to step down in 2019, pledges ‘smooth transition’

Jack Ma, who founded e-commerce giant Alibaba Group and helped to launch China’s online retailing boom, announced Monday, Sept. 10, 2018 that he will step down as the company’s chairman next September. (AP)
Updated 10 September 2018
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Alibaba founder Jack Ma to step down in 2019, pledges ‘smooth transition’

  • Ma, who has expressed a desire to follow in the philanthropy footsteps of Microsoft founder Bill Gates, said he would remain on Alibaba’s board until 2020
  • Ma was an English teacher before starting Alibaba in his apartment in the eastern city of Hangzhou in 1999

SHANGHAI: Alibaba co-founder Jack Ma announced on Monday he would step down as head of the pioneering Chinese e-commerce giant in one year, a departure already drawing comparisons to the retirement of late Apple founder Steve Jobs.
Analysts said the early withdrawal of the 54-year-old Ma, who became the charismatic face of a company that has revolutionized how and what China’s people consume, will test the company’s ability to carry on Ma’s vision amid rising competition.
But like Apple’s transition to current boss Tim Cook, Alibaba CEO and anointed successor Daniel Zhang may be less magnetic than his predecessor but has proven an able steward since effectively taking the operational reins years ago, they said.
“Day-to-day operations-wise Alibaba will not be affected that much. But since he’s (Ma) the face of the company, people may lose a little bit of faith,” said Jackson Wong, associate director with Huarong Securities in Hong Kong.
“But where Jobs died, Ma is expected to stay on in an advisory role, so there shouldn’t be too much impact.”
Ma — who turned 54 on Monday — said in a statement that he will stay on as executive chairman until his 55th birthday before handing over that role to Zhang.
“While remaining as executive chairman in the next 12 months, I will work closely with Daniel to ensure a smooth and successful transition,” Ma said.
Ma, who has expressed a desire to follow in the philanthropy footsteps of Microsoft founder Bill Gates, said he would remain on Alibaba’s board until 2020.
“The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba,” he said.
Ma was an English teacher before starting Alibaba in his apartment in the eastern city of Hangzhou in 1999 — where its headquarters remain to this day — building it into an e-commerce colossus and becoming one of the world’s richest men and most recognizable figures in China.
He has a net worth of more than $40 billion according to the Bloomberg Billionaires Index, and Alibaba, which has shares listed in New York, was valued at $420.8 billion as of last Friday.
“Ma possesses an enviable clarity about how everything fits together,” said Mark Tanner, founder of Shanghai-based research and marketing company China Skinny, told Bloomberg News.
“He has understood Chinese consumer needs better than anyone and provided online services to meet them through convenience, entertainment and efficiencies.”
Alibaba sought to reassure investors of the change, with Ma saying he had “full confidence” that a leadership hierarchy in place for years will “win support from customers, employees and shareholders.”
But while Alibaba may lose the company’s face, analysts said the business brains remain with Zhang.
With his impish grin, Ma in recent years has largely assumed a role as a globe-hopping ambassador, marked by playful antics such as dressing up as Michael Jackson for a dance routine at a company gathering last year.
But it has been largely under the more reserved Zhang’s stewardship that Alibaba’s two main e-commerce platforms, Taobao and Tmall, have turned into richly profitable cash cows and other arms such as digital payments have flourished, said Wong of Huarong Securities.
The company has wowed investors year after year with sterling revenue growth with Zhang at the helm.
But Alibaba faces intense competition in China from the likes of rivals Tencent, JD.com, and other rising upstarts.
Alibaba still dominates Chinese e-commerce, however, and is pouring investment into new initiatives to broaden its ecosystem and stake out position in fast-growing future arms.
These include bricks-and-mortar retail, cloud computing, digital media, movies, the grocery sector, meal deliveries and advertising.
It also has upped investments in overseas ventures and in 2015 bought the South China Morning Post newspaper.
Alibaba did not specify exactly what Ma has planned post-retirement, but the former teacher has in recent years taken on education initiatives as pet projects.
“I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle,” he said.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.