TECH Renaissance Capital Expects Fewer Chinese Companies to List in the U.S. Once New Regulations Kick in
Fewer Chinese companies are expected to go public in the U.S. market once new financial regulations kick in and those that are already listed there may return to China if they cannot comply with the rules, an investor told CNBC. Alibaba affiliate Ant Group, for example, is preparing for a dual listing in Shanghai and Hong Kong in one of the most highly anticipated initial public offerings.
The American government is threatening to ban “corporate China” from the U.S. stock market, delisting hundreds of Chinese companies. At the same time, lots more Chinese firms are rushing to go public – not in Shenzhen, not in Shanghai, but in New York.
The U.S. government is threatening to delist Chinese companies that do not meet U.S. accounting standards, but mainland firms are rushing to offer their shares on New York exchanges, sometimes in blockbuster deals. Despite the threat and rising U.S.-China tensions, the allure of a valuation on the world’s deepest stock market makes the risk of eventual delisting manageable, while financial-technology companies find the regulatory burden of a U.S. listing lighter than that in mainland China or Hong Kong.