The Strategist

Chinese companies raise record $11B on US exchanges since the start of 2021

04/27/2021 - 03:38

Chinese companies have never before floated their securities on U.S. exchanges so aggressively, the Financial Times reports.

According to Dealogic, since the beginning of the year, Chinese companies have raised a record $11 billion through IPOs and subsequent stock sales and bond issues. This is 440% more than in the first quarter of 2020.

Bloomberg reports that Chinese companies raised $6.6 billion through initial public offerings on US exchanges alone, which is also a record. Among this year's biggest IPOs are e-cigarette maker RLX Technology's $1.6bn offering and software developer Tuya's $947m listing.

The record pace of listings by Chinese companies on US exchanges comes despite the threat of sanctions against Chinese companies (if US authorities suspect them of having links to the Chinese military or government, they may ban US companies and individuals from investing in their securities too) and also a December 2020 law that could ban foreign companies from trading on US exchanges if they fail to comply with external auditing requirements imposed by US companies 

The New York Stock Exchange has already delisted three Chinese state-owned companies - China Telecom, China Mobile and China Unicom - under the law. However, as bankers and IPO lawyers point out, a US listing still gives Chinese groups access to the market with greater depth and coverage of the stocks studied by analysts.