The Hong Kong Stock Exchange. [Photo/Agencies]
As of May 25, 39 companies have filed similar float plans, according to the regulator
The first two companies scheduled to list overseas after new regulations on overseas listings of mainland companies came into force on March 31 have completed their filing with China’s securities regulator, said Fang Xinghai, vice chairman of the top securities regulator of the country .
Fang made the remarks at the 2023 Global Investor Conference held in Shenzhen, Guangdong province on Thursday.
Suzhou and Jiangsu province-based autonomous driving solutions provider iMotion Automotive Technology and Beijing-based staple food supplier Shiyue Daotian Group on Tuesday received their approvals from the regulator to list on the Hong Kong Stock Exchange.
Ongoing global market volatility and the risk of economic downturns in major economies have impacted IPOs on major exchanges.
Global funding value and the number of IPOs fell 65 percent and 20 percent year-over-year in the first quarter, respectively, professional services provider KPMG said.
Proceeds from the U.S. IPO for the first three months were less than $3 billion, the lowest since 2017, KPMG said.
According to the latest data released by the CSRC, as of May 25, 39 companies had submitted their overseas listing applications to the regulator, three of which went to the Nasdaq while the rest went to the Hong Kong stock exchange.
The CSRC on Feb. 17 enacted new regulations governing the overseas listing and securities issuance of mainland China companies. The regulations provide a filing-based mechanism and eliminate prior administrative review.
They also clarify legal responsibilities, particularly around violations, and relax certain limits for eligible companies to better meet their funding needs.
The new rules also emphasize streamlining cross-border securities regulation cooperation, which will facilitate further China-US audit cooperation and reduce the delisting risk of US-listed Chinese companies, said Liu Gang, strategist at China International Capital Corp Ltd.
The rules also facilitate more opening of China’s capital markets, meaning global investors will have more opportunities to benefit from China’s economic growth, he said.
Since mid-2021, mainland China companies have slowed their pace of listing on US exchanges.
The new rules are expected to normalize overseas listings and facilitate overseas companies’ financing channels, Liu added.
While 37 mainland Chinese companies made their debut in U.S. stock markets in the first half of 2021, only three such IPOs took place in the second half of the year, mainly due to an audit dispute between China and the United States.
According to market researcher Wind Info, the number fell further to 12 in 2022.
CSRC’s Fang said at the meeting that the depositary receipts business under the Stock Connect program will be expanded and streamlined to support more issuance of Global Depositary Receipts in European markets by mainland China companies.
Data from the public sector shows that so far this year, five companies have received CSRC approval for DDR emissions, while 16 more have received this approval in 2022.
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