Alibaba set to price shares as investors gear up for flotation

Chinese online giant Alibaba is expected to set the price of its shares later in what could be a record-breaking initial public offering (IPO).

Alibaba could raise between $22bn (£13.5bn) and $25bn when it lists its shares in New York.

The previous record IPO was set by Agricultural Bank of China's $22.1bn listing in 2010.

Alibaba said in an official filing on Monday that it expected to price its shares at between $66 and $68 a share.

The increase suggested demand for the firm's shares is high.

The shares are due to be priced after US markets close on Thursday, and start trading on the New York Stock Exchange on Friday.

Company executives and advisors have been meeting with potential institutional investors during the past week to gauge the likely demand for the shares so that they can set a price.

Trading in the 368 million shares being sold is expected to be frenetic in the early hours after the market opens.

According to financial information company Dealogic, Alibaba is expected to have a market capitalisation of about $165bn

The online retailer, which accounts for 80% of all online retail sales in China, handles more transactions than Amazon and eBay combined.

Alibaba acts as an online marketplace for wholesalers, retailers, and small businesses, and handles e-payments and financial transactions. The company has also branched out into cloud computing and instant messaging.

The firm made a profit of almost $2bn in the three months to the end of June, with sales up by 46% year-on-year to $2.54bn.

Alibaba plans to use the proceeds from the listing to expand in the US and Europe, founder Jack Ma said on Monday.

Control over Alibaba will stay in the hands of Mr Ma and other company veterans. A group of 27 managers dubbed the "Alibaba Partnership" will have the power to nominate a majority of board members.

Regulators at the Hong Kong stock market objected to this structure, which resulted in Alibaba deciding to list in New York.

Alibaba says the arrangement will help it to preserve its innovative culture.

Alibaba Group owns or has stakes in several businesses, including: