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The value of the stock quotes of Chinese technology companies fell more than 60% in the second quarter, as Beijing regulators extended repression against the sector.
Since early April, Chinese technology groups’ initial public offerings on exchanges around the world have raised just $ 6 billion, nearly two-thirds from the first quarter, according to Dealogic data.
The share of technology listings in proportion to all Chinese mutual funds also fell to its lowest level in two years, with only 21% of the more than $ 28 billion raised during the period.
The decline occurs as Chinese technology groups have it faced pressure from Beijing, which in recent months has intensified regulatory control of some of the most important names in the sector.
Regulators locked the IPO of 37 billion dollars of Ant Group, the fintech group controlled by a billionaire Jack Ma, in November, and have ordered the business restructure. Authorities have also punished technology groups for what they consider monopolistic practices, including a fine on Ant’s sister e-commerce group, Alibaba. record $ 2.8 billion.
“The regulatory issue in China is more fundamental because it will question the valuation you can give to your business, this is particularly true for financial technology companies,” said Frank Benzimra, Asia’s head of equity strategy. of the Société Générale. “Without a doubt, this matters a lot to companies looking for a IPO.”
He sharp drop in technological IPOs the second quarter contrasted with the first quarter, in which these groups raised more than $ 15.3 billion in stock sales in Shanghai, Shenzhen, Hong Kong and New York.
It also came despite a wider boom in Chinese OPCs, as primary and secondary lists around the world rose to a record $ 65.4 billion in the first six months of the year, according to the Dealogic data.
Much of the fall came to Hong Kong. The city’s exchange has not hosted any technological listing in mainland China in the past three months, after $ 8.6 billion in IPOs in the first quarter.
Louis Tse, managing director of Hong Kong brokerage Wealthy Securities, said the drop was caused by both the global shift in investors from high-growth stocks and the fall in Chinese companies. looking for secondary listings in the city.
Over the past year, Chinese internet groups have been listed in the United States, including JD.com, NetEase and Baidu has raised billions of dollars in Hong Kong as concern grew that they might withdraw to New York. The United States passed a law in December that forcibly eliminates companies which violate U.S. audit standards.
“This has been exhausted because… After numerous waves of applications to list in Hong Kong, there aren’t that many companies left,” Tse said.
However, Chinese technology IPOs could be set to return to it. Chinese manufacturer of electric vehicles Xpeng said on Friday that it would try to raise up to $ 2.3 billion in a Hong Kong-listed quote starting next month. Didi Chuxing walking group plans to raise $ 4 billion on a potential listing on the NYSE list in the coming weeks.
Jason Elder, a partner at law firm Mayer Brown, said the absence of Chinese technology listings in Hong Kong during the second quarter was “unusual and anomalous,” but added that there was no way that the pace of listed at the beginning of the year could continue forever.
“I don’t think it’s a harbinger of the market losing its appeal or not being open to technology; I see it as a time issue,” he said.
Unhedged: markets, finance and a strong opinion
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