(Repeats story first carried late on Friday)
HONG KONG/SINGAPORE, Dec 3 (Reuters) - Ride-hailing giant
Didi Global's plan to withdraw from the New York stock
exchange may create an even deeper chill after this year's
drop-off in Chinese firms' listings in the world's most liquid
market, bankers and advisers said.
Chinese listings in the United States have fallen sharply
since Didi https://www.reuters.com/technology/didi-global-start-work-delisting-new-york-pursue-ipo-hong-kong-2021-12-03
debuted in New York on June 30 - defying regulators' wishes to
pause the listing - due mainly to concerns about an
unprecedented regulatory crackdown on technology companies.
Two days after Didi's $4.4 billion initial public offering,
Chinese regulators ordered an investigation into the company
which remains underway, ordered app stores to remove 25 of its
mobile apps, and blocked the app for new users in mainland
The regulatory action, alongside the U.S. government's
ongoing threat to delist Chinese companies not compliant with
its auditing rules, has already prompted a sharp slowdown in
The second half of this year has been the quietest six
months for U.S. listings by Chinese firms since the first half
of 2017, and so far in 2021, listings have totalled nearly $13
billion compared to $13.6 billion last year, Dealogic data
Chinese companies that list on U.S. stock exchanges must
whether they are owned or controlled by a government entity,
and provide evidence of their auditing inspections, the
Securities and Exchange Commission (SEC) said on Thursday.
"We're only going to see limited IPOs out of China into the
U.S. now," one Hong Kong banker told Reuters, as the city's
financial sector digested the impact the Didi decision would
have on the listing pipeline.
The banker declined to be named, as the person was not
authorized to speak to the media.
Independent research analyst Mitchell Kim, who publishes on
the Smartkarma platform, said that already cautious investors
would become more nervous about future Chinese IPOs in the
world's largest economy.
"U.S. investors may fear investing in Chinese companies,
which means Chinese companies may get choked off from accessing
U.S. capital," Kim said. "In particular, the Chinese techs could
face a greater challenge because so many tech investors are
based in the U.S."
Golden Gate Ventures partner Justin Hall said while Didi's
delisting might negatively impact global investor appetite for
Chinese technology companies, it's too early to say the same for
Chinese retail and institutional investors.
"It's important to note that simply because Chinese
technology companies may no longer list as frequently in the
United States, that's not to say they can't have wildly
successful public offerings on Chinese exchanges," he said.
"By the same vein, founders of Chinese technology companies
may opt for safer exchanges in the future, given that all the
time and resources required to list on the U.S.-based exchanges
would be for naught if they're subsequently required to delist."
Hong Kong has benefitted from the Sino-U.S. spat with a
string of U.S.-listed Chinese firms carrying out secondary
listings there in recent years, partly as a back-up in case they
are delisted from New York, say market participants.
Another investment banker in Hong Kong was slightly more
optimistic that Chinese companies not handling large amount of
data could still opt for a New York listing.
Sources told Reuters last month that Chinese regulators had
pressed Didi's top executives to devise a plan to delist from
the New York Stock Exchange due to concerns about data security.
"Didi's issue is with data. If the data issue is resolved,
then it will be ok," said the banker, who also declined to be
named due to the sensitivity of the matter.
(Reporting by Scott Murdoch in Hong Kong and Sayantani Ghosh in
Singapore; Editing by Sumeet Chatterjee and Jan Harvey)