Chinese regulators, including the China Securities Regulatory Commission (CSRC), have reportedly requested top global banks to expedite offshore listings for Chinese companies in Hong Kong in an effort to boost overseas fundraising and revive the economy.
According to unnamed sources contacted by Reuters, regulators in mainland China and Hong Kong have addressed some of the world’s biggest investment banks to accelerate Chinese companies’ listings in the city-state.
Meetings held since October have included major global bank brands like JPMorgan, Goldman Sachs, and UBS, as well as representatives of reputable law firms.
In addition to that, Hong Kong’s stock exchange has also held separate meetings with global banking leaders to consult on optimising certain processes to attract listings. This marks a policy shift following tightened rules in 2023, as geopolitical tensions and economic challenges further drove a decline in offshore IPOs.
Hong Kong currently remains a key offshore fundraising hub for Chinese firms. An increase in listings would bolster Hong Kong’s attractiveness as an IPO destination even more, as Chinese companies are likely to avoid fundraising in the U.S., given concerns over escalating geopolitical tensions with President-elect Donald Trump. A revival in IPO activity would also align with China’s recent efforts to publicly support Hong Kong, which has faced challenges like pro-democracy protests, a talent drain, and economic slowdowns in recent years.
China’s CSRC encouraged intermediaries to expedite offshore IPOs for pre-approved companies, emphasizing notable deals to boost market confidence.
Since March last year, the approvals of listing candidates have been longer, involving more regulatory scrutiny and more government agencies. Such obstacles in fundraising caused a total IPOs and second listings’ decline to $14 billion in 2022, down 75% from 2021, with new listings by Chinese firms in the U.S. down 96%.
Today, to fasten the offshore fundraising process, parties consider fast-tracking second listings of companies already listed on the mainland. Officials expect second listings to constitute a larger share of Hong Kong’s IPO activity by 2025, potentially surging to around 50% of the bourse’s listings business.
