The value of Chinese tech stock market listings fell by more than 60 percent in the second quarter, as regulators in Beijing expanded their crackdown on the sector.
Since the beginning of April, initial public offerings by Chinese tech groups on exchanges worldwide have raised just $6 billion, down nearly two-thirds from the first quarter, according to data from Dealogic.
The share of technology listings as a share of all Chinese initial public offerings has also fallen to a two-year low, at just 21 percent of the more than $28 billion raised during the period.
This decline comes as it happened with Chinese technology groups Face pressure from Beijing, which in recent months has stepped up regulatory scrutiny of some of the biggest names in the sector.
organizers prevented The $37 billion IPO of Ant Group, a billionaire-controlled fintech group Jack Ma, In November, the company ordered Restructuring. Authorities have also punished tech groups for what they consider monopolistic practices, including fining sister e-commerce group Alibaba a. Record 2.8 billion dollars.
“The regulatory issue in China is more fundamental because it would call into question the valuation you could give your business — and this is especially true for fintech companies,” said Frank Benzemra, head of Asian equity strategy at Société Générale. “Certainly this is very important for companies looking at an IPO.”
The Sharp drop in technical IPOs The second quarter contrasts with the bumper first quarter, in which such groups raised more than $15.3 billion in stock sales in Shanghai, Shenzhen, Hong Kong and New York.
It also came despite the broader Chinese IPO boom, with primary and secondary listings worldwide hitting a record $65.4 billion in the first six months of the year, Dealogic data shows.
a lot of drop Came in Hong Kong. The city’s exchange has not hosted a single technology listing from mainland China in the past three months, following $8.6 billion in IPOs in the first quarter.
Luis Tse, managing director of Wealthy Securities brokerage in Hong Kong, said the decline was due to a global shift by investors away from high-growth and low-growth stocks in Chinese companies. Search for secondary listings in the city.
Over the past year, Chinese Internet groups traded in the United States including JD.com, NetEase and Baidu has raised billions of dollars in Hong Kong as fears grow that it could be delisted in New York. The United States passed a law in December by force write off companies that do not comply with US auditing rules.
“That fizzled out because . . . after a few waves of applications for listing in Hong Kong, there are not many companies left,” Tse said.
However, Chinese tech IPOs could be poised for a comeback. Chinese electric car maker Exping On Friday, it said it would seek to raise up to $2.3 billion in a Hong Kong listing as trading begins next month. Didi Chuxing Riding Set It plans to raise $4 billion Possibly on the NYSE list in the coming weeks.
Jason Elder, partner at law firm Mayer Brown, said the absence of Chinese tech listings in Hong Kong in the second quarter was “unusual and anomalous” but added that there was no way the pace of listings at the start of the year could continue forever.
“I don’t think it is a harbinger of a market losing its attractiveness or not being open to technology – I see this as a matter of timing,” he said.
Without Hedging – Markets, Finance and Strong Opinion
Robert Armstrong explains the most important market trends and discusses how the best minds on Wall Street respond to them. Participation Here To send the newsletter directly to your inbox every day of the week