All international investment banks and broker-dealers have some presence in Hong Kong despite its recent political turmoil. Treasury Department issued a “Hong Kong Business Advisory” notice warning businesses operating in Hong Kong that they face rising risks to their business as the CCP escalates its clampdown in the city. “Meanwhile, the U.S.’s share will likely steadily decline.” (Domestic) A-shares’ contributions should also rise, but by a lesser degree, given Hong Kong offers better access to international capital and should, in theory, be easier for global investors to trade. Morgan Stanley wrote in a note to clients on July 16: “Hong Kong’s contribution to Chinese IPO fundraising will expand in the future. Meanwhile, Lalamove, a Chinese logistics company, recently switched its upcoming IPO to Hong Kong from New York, according to a South China Morning Post report. Neither company has elaborated on its plans. LinkDoc, a Chinese medical data provider, shelved its IPO earlier in July. Xiaohongshu, a social media company, recently tabled its plans to sell shares in New York this month. Some Chinese companies are reconsidering their U.S. Hong Kong has few economic barriers for cross-border transactions, and offers-at least nominally-a staging area for international investors to access the Chinese market. Listing in Hong Kong instead of the United States is one way to potentially avoid a big hurdle. will undergo a formal review,” Bloomberg noted. If successful, it could be a clever way for Beijing to have its cake and eat it too.Ĭiting people with knowledge of the ongoing discussions, “The Cyberspace Administration of China will vet companies to ensure they comply with local laws, but only those headed to other countries such as the U.S. The discussions are still ongoing, according to a July 15 Bloomberg report, although Beijing regulators have discussed this proposal with bankers recently. The CCP is considering exempting companies going public in Hong Kong from needing approval from China’s CAC. The decision comes weeks after ride-hailing app Didi Chuxing’s New York initial public offering, and it could slow the parade of Chinese tech IPOs into the United States.īut it might not slow the flow of foreign capital into China. A plan seems to be emerging in China to allow foreign capital to keep flowing into the country while granting Beijing increased control over its companies’ stock issuances.Įarlier this month, Chinese regulators, including the Cyberspace Administration of China (CAC), the State Council, China’s cabinet, and the Chinese Communist Party’s (CCP) Central Committee, announced that a new regulatory framework is necessary to oversee foreign stock listings of Chinese companies.
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