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Europe becomes bigger IPO market than US for Chinese firms 2022-09-09
Europe Becomes Bigger IPO Market Than US for Chinese Firms
Europe has overtaken the United States for the first time in terms of the amount of proceeds raised by Chinese companies from initial public offerings and secondary listings, according to data from UK financial markets platform Dealogic.
Five Chinese companies secured over USD2.1 billion through listings on the Zurich and London stock exchanges this year, compared to less than USD400 million raised by Chinese companies in New York.
China expanded its stock connect mechanism, which has been linked to Hong Kong and London for some years now, to Switzerland and Germany in February.
Battery giants Ningbo Shanhan, GEM and Gotion High-Tech as well building materials maker Keda Industrial Group were the first mainland firms to go public on the Six Swiss Exchange after the China-Switzerland stock connect program began to issue global depositary receipts on July 28, raising a combined USD1.5 billion.
Carbon products supplier Fangda Carbon, biomedical firm Lepu Medical Technology, chipmaker Will Semiconductor, drinks producer Eastroc Beverage and many other Chinese companies are also planning flotations on the Six Swiss.
“The listings in Zurich and Frankfurt indicate that Chinese issuers are more capable of reaching European investors more directly,” said Jason Elder, a partner at law firm Mayer Brown.
Fewer firms chose to go public in Hong Kong but the special administrative territory remains the biggest offshore IPO market for mainland companies with USD6.6 billion raised so far this year.
And more Chinese financial institutions are expanding their footprint in Europe. Investment firm China International Capital’s branch in the UK became the first Chinese member of the Six Swiss Exchange in June. China’s second largest brokerage Huatai Securities is seeking stock trading licenses in Zurich and Frankfurt.
And other brokerages, including Citic Securities and Haitong Securities, are also considering applying for licenses to provide investment banking services across the EU. Deliberations are ongoing, according to people familiar with the matter.
Source: Yicai
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