Global investment banks are racing to redirect Chinese groups’ initial public offerings towards Hong Kong after new cyber security rules instituted by Beijing halted lucrative tech listings previously heading for New York.
About 20 Chinese companies had publicly disclosed plans to raise $1.4bn from share sales in New York this year, Dealogic data showed. But that was before regulators in Beijing launched an investigation into Didi Chuxing, just days after the Chinese ride-hailing group’s $4.4bn New York flotation. News of the probe sent Didi shares down 20 per cent from its IPO pricing.
The intervention by Chinese regulators has thrown further US listings into doubt and set off a scramble to redirect deals. Advising Chinese companies on IPOs has been a lucrative business for banks including Goldman Sachs and Morgan Stanley, generating fee revenue of $460m in the first half of the year.