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Banks are reportedly scrambling to move IPOs of Chinese companies from New York to Hong Kong after regulators cracked down on overseas listings


Regulators’ harsh response to Didi’s IPO has forced the 20 or so Chinese companies that had plans to go public in New York to re-evaluate, according to a Financial Times report.
34 Chinese firms raised $12.4 billion in New York capital markets in the first half of this year, according to Dealogic data.
Data-oriented companies have been most eager to plan for Hong Kong listings, in large part because the mainland government’s crackdown has centered around data privacy.

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Investment banks are scrambling to divert Chinese IPOs away from the US market and into Hong Kong as the government’s crackdown on foreign listings spreads, according to a Financial Times report.

Regulators’ harsh response to China’s last major foreign IPO, that of Didi Chuxing, has forced the 20 or so Chinese companies that had plans to go public in New York to re-evaluate.

Bankers who spoke with the FT said clients are exploring moving listings to Hong Kong but are also wary of the hurdles. Hong Kong-specific regulatory requirements and the inherent uncertainty of going first were among the leading concerns.

“We’re speaking to everyone about it,” one Hong Kong-based investment banker told the FT. “If you want to do a deal this year, at best you’ll be delayed until 2022 and at worst you won’t be able to do it.”

The move toward Hong Kong is an abrupt shift for corporate China. 34 Chinese firms raised $12.4 billion in New York capital markets in the first half of this year, according to Dealogic data previously reported by the FT.

In the wake of Didi’s NYSE debut, China’s cybersecurity ministry alleged the company had violated privacy laws and launched an investigation into its data practices. The action took Didi’s stock price down sharply the day of the announcement.

Data-oriented companies have been most eager to plan for Hong Kong listings, in large part because the mainland government’s crackdown has centered around data privacy. Moving to Hong Kong could abate some of that scrutiny, two bankers told the FT.

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Source:: Business Insider

      

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