![]() Tapping the mainland pipelineĪnd a primary listing on the HKEX offered one critical advantage for Chinese companies: direct access to mainland investors. “The writing is on the wall for these companies,” Ren says. In May, video platform Bilibili said that it had applied for a HKEX dual primary listing and aims to finalize the deal in October. SoftBank-backed e-commerce firm Dingdong has begun preparing for a dual primary listing in Hong Kong, according to a recent Reuters report. ![]() Hong Kong should “expect a flurry” of U.S.-listed Chinese firms seeking a primary Hong Kong listing, Travis Lundy, analyst at Quiddity Advisors, an investment advisory firm, wrote in a Monday note. could soon be over,” Ren says.Īlibaba’s pivot “will prove a catalyst” for its peers to follow suit, Adam Montanaro, investment director of global emerging markets equities at abrdn, told Fortune. “Every feature of Alibaba points to the fact that its time in the U.S. Alibaba, an e-commerce and cloud provider with over 1 billion users, would most likely be classified as a company holding information that Beijing wants to keep within its borders. But companies holding what Beijing deems as sensitive and secret data would be required to delist from the U.S., as it wants to prevent foreign authorities from accessing such information.Ĭhina recently enacted new data security and personal information protection laws, which gives its authorities more control over private companies’ data in the name of national security. Beijing would likely allow those in the first category to open their books to American regulators. delisting, Liqian Ren, director of ModernAlpha at Wisdom Tree Asset Management, told Fortune.Ĭhina is angling for a compromise that would see U.S.-listed Chinese firms divided into three categories: those that hold non-sensitive, sensitive and secret data, according to an FT report. With the 2024 delisting deadline looming closer, and Washington and Beijing seemingly no closer to reaching an agreement, this strategy made the most sense for Alibaba given that it’s at a high risk for a U.S. Secondary listings are easier, quicker, and cheaper to complete than primary listings.Īlibaba will convert its secondary listing into a dual primary listing in New York and Hong Kong. Over the last few years, Chinese companies have pursued secondary listings-also known as ‘homecoming listings’-in Hong Kong to hedge against the U.S. investors purchase shares in foreign firms. institutional investors alone hold $200 billion of exposure to Chinese American Depository Receipts (ADRs), a specific security that lets U.S. The loss of China-based companies from New York would make it more difficult for Americans to invest in Chinese companies. Hong Kong hedgeįor Chinese firms, Hong Kong’s sophisticated capital market and closeness to mainland China makes it the most attractive Wall Street alternative in the event of a mass U.S. And, experts say, it could be the catalyst that sparks a wave of Chinese tech giants flocking to the city for a primary listing, which could result in billions of inflows for one of Asia’s top stock exchanges. ![]() Alibaba’s move also provides a blueprint for its peers-offering a viable back-up plan that allows direct access to a new pool of mainland China investors in case of a U.S. The primary-rather than secondary-listing in Hong Kong of one of China’s most vaunted tech firms will strengthen the Asian bourse’s role as Wall Street’s replacement for Chinese securities listed in the U.S. and China fail to ink a deal, 261 U.S.-listed Chinese firms worth $1.3 trillion could be booted from American stock exchanges. is demanding full access, according to Bloomberg. Washington and Beijing are negotiating rules that would allow American officials to inspect the books and auditors of Chinese companies that are publicly listed in the U.S., but the two sides have been unable to strike an agreement.ĭiscussions have hit an impasse because Beijing wants to redact sensitive information in Chinese firms’ audit papers over national security concerns, but the U.S. On Monday, the company announced that it will pursue a primary listing on the Hong Kong Stock Exchange (HKEX), as the 2024 deadline for U.S.-listed Chinese firms to comply with U.S. Less than a decade later, Alibaba’s calculus has changed.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |