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A new record for Chinese listings on American stock exchanges

The best start to a year ever for Chinese listings on American stock exchanges is showing signs of strain.

Photo by Pixabay

Author: Narayanan Somasundaram

Source: Nikkei Asia

Chinese companies raised $4.4 billion on the New York Stock Exchange and the Nasdaq Stock Market through April 7 compared with just $807 million over the same period last year, according to data compiled by Dealogic.

Yet the 10 Chinese companies that have debuted in New York since Feb. 9 have fallen on their first day of trading. Question-and-answer website Zhihu dropped 11% in its debut March 27 after pricing the $523 million offering at the bottom of its marketed range.

By comparison, 17 Chinese companies that each raised at least $100 million in U.S. IPOs last year gained 28% on their debut, according to Dealogic.

"A combination of geopolitics, concerns over valuation and fears there could be more episodes such as Archegos Capital is denting the strong start to the year for equities in general and for Chinese listings in the U.S.," said Terence Ng, co-founder of investment advisory company IJK Capital Partners in Singapore, referring to a U.S. family office which last month triggered billions in losses for banks including Nomura and Credit Suisse in fire sales of its holdings, including shares of Chinese internet companies Baidu and Tencent Holdings.