One day after Nasdaq was reportedly set to tighten rules that would increase the difficulty for Chinese firms to list, the London Stock Exchange was named as the next IPO hub target.
Chinese firms looking to sell global depository receipts (GDR) on the London bourse are set to see a boost as Beijing resumes processing of applications, according to a «Reuters» report citing unnamed sources. Applications that were earlier made public and postponed will be first in line though not many may receive approvals initially.
This follows one day after reports claimed that Nasdaq would be rolling out new rules that would curb Chinese listings such as a minimum IPO size or a minimum threshold of foreign shareholders to combat heavy ownership concentration in the hands of several insiders.
London-Shanghai Connect
Despite kicking off last year, the Shanghai-London Stock Connect scheme has resulted in lackluster demand with just one Chinese firm – Huatai Securities – made accessible to investors. This compares to nearly 200 Chinese companies listed on the Nasdaq and New York Stock Exchange.
The driver for the slow start to London-based listings was perceived to be due to the U.K administration’s response under Boris Johnson to the anti-government response in Hong Kong.
Company Decision
Following the release of the report, the Shanghai Stock Exchange issued a statement claiming that it had been continuously promoting the Shanghai-London Stock Connect program and noted that offshore listing decisions were made by companies themselves based on their own needs.
China Pacific Insurance and SDIC Power will go head with their London-based listings, sources added, alongside the secondary listing of China Yangtze Power.
