Shares in the owner of Hong Kong-based newspaper Ming Pao shot up Thursday on rumours that Chinese Internet giant Alibaba was in talks to buy it, days after it snapped up the city's South China Morning Post.

The report of the potential buyout came as fears grow that China is trying to influence the city's media in the wake of pro-democracy rallies last year. Alibaba denied outright that it was in talks to buy the newspaper.

But shares in Ming Pao's owner, Media Chinese International, soared 38 percent in Hong Kong morning trade following the report in the Australian Financial Review, which quoted an unnamed source.

Gains narrowed in the afternoon. Trading closed at 1.22 HK dollar (0.16 US dollars) per share, up 12 percent, compared to a 0.8 percent gain for the benchmark Hang Seng Index. Ming Pao is a liberal Chinese-language newspaper that has been critical of Beijing.

Its former editor Kevin Lau was the victim of a vicious daylight knife attack in 2014, which sparked concerns that journalists in Hong Kong were being targeted. The Australian Financial Review said the source had "direct knowledge" of the deal and that "ongoing" talks could take months to complete.

However, an Alibaba spokesman told AFP: "We are not in talks to buy the (Ming Pao) paper." Concerns are growing over press freedoms in Hong Kong after a string of attacks on journalists, reports of pressure on editorial staff from authorities and increasing self-censorship.

Hong Kong is semi-autonomous after being handed back to China by Britain in 1997 and retains freedoms unseen on the mainland. However, there are fears that they are being eroded, particularly since last year's mass pro-democracy protests in the city and the rejection of China's political reform package in June -- an unprecedented rebuke to Beijing.

Some analysts predict the SCMP's coverage will inevitably be affected by Alibaba's buyout last week. They believe founder Jack Ma's close ties with Beijing will lead to the newspaper promoting a China-centric view.

Readers' trust in the newspaper has already dipped over a more pro-Beijing editorial policy, a shift that took place after Malaysian tycoon Robert Kuok took control in 1993.

Ma founded Alibaba in 1999 and under his stewardship it has become China's biggest e-commerce company, operating consumer-to-consumer platform Taobao, which is estimated to hold more than 90 percent of the mainland market.

It has also branched out, buying ChinaVision Media in 2014 and renaming it Alibaba Pictures, today China's biggest film company. (AFP)