In Hong Kong capital markets circles, one question has trumped all others over the past month: What will Alibaba do?

The Chinese e-commerce giant is planning what is expected to be the world’s largest initial public offering since the $16 billion Nasdaq debut of Facebook Inc. last year. If Alibaba Group Holding Ltd. goes ahead with a listing in Hong Kong, it could be a huge shot in the arm to a market that has seen a major slowdown in IPOs over the last two years.

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