Chinese Companies Rethink U.S. IPOs

Chinese apartment rental company Bestbond plans to have a Nasdaq flotation for a year or two now. However, because of the U.S.-China trade war getting worse, the Hong Kong stock exchange pop up as a possible candidate.

CFO Wang Jia stated, “We’re having second thoughts.”

In addition to that, Jia said that it’s true Hong Kong is beset with political unrest. But it has become more charming following the news of Friday where President Donald Trump’s administration was considering on delisting Chinese firms from U.S. bourses.

However, Nanjing-based Bestbond still prefers Nasdaq due to its higher profile, with a more liquid market that would likely offer better valuations. But still, the firm can’t afford to have its eggs in just one basket.

On the other hand, a U.S. Treasury official explained that Trump administration was not thinking of blocking Chinese companies from U.S. listings as of now. And the chance it may do so has come out in much handwringing by mainland firms that had been looking at a U.S. IPO.

Limit in Chinese Firms

Moreover, according to some sources, the U.S. move is a part of a much bigger idea to limit U.S. investment in Chinese firms. On the other hand, a source is saying that security concerns motivate it.

CEO Terence Lin thinks that the threat of Trump will be hard to impose legally. And it is merely a negotiation strategy in the rapidly worsening trade tensions between the two countries.

The threats, even though they are challenging to do, are bound to damage Chinese firms listed in the United States. And also, it will hurt providing bourses such as the Hong Kong and London stock exchanges. These have a fresh and lucrative opportunity to woo Chinese companies.

Meanwhile, New Vision Capital partner Frederick Shen took his portfolio tech startups to list on the newly launched STAR Market instead of the Nasdaq.