But both markets have stricter regulations than the US. A Shanghai or Shenzhen listing will work in some cases, while for others, floating on the HKEX would be the way to go. This raises a key question: how can banks still win ECM business, while offering their clients the best solutions?īanks that have teams bridging the Mainland and Hong Kong, particularly with strong onshore joint ventures, are best placed for the time being. For some issuers, the IPO market is no longer the best fundraising option, be it in Hong Kong or in onshore China. In Hong Kong, ECM teams at bulge bracket banks and regional firms are having to adapt.
But the biotechnology firm is an exception - it is jointly headquartered in the US and China, and its listing was handled by the underwriters’ US bankers. The only China-into-US IPO over $100m since the summer was a $325m float by LianBio in late October. There has been a trickle of American depository share (ADS) listings by Chinese companies since relations between the countries’ IPO markets froze in July 2021.īeijing stunned investors when it launched a cybersecurity probe into ride-hailing firm Didi just days after its $4.4bn New York Stock Exchange listing, wiping billions of dollars off its market capitalisation.ĭeal flow dried up soon after.
This means franchises need a comprehensive China platform if they want to emerge victorious. Not all issuers are created equal, but neither are Asia’s stock exchanges nor the banks operating in ECM. The Chinese government’s crackdown on US listings from Mainland companies has led to a rapid change in the region’s ECM this year.įirms once considering a New York IPO are having to re-think their plans, and in some cases shelve a listing altogether in favour of other forms of fundraising. Equity capital market houses are seeing a fundamental shift to their Greater China businesses - a shift that could help banks make their client offerings stand apart from the rest.
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