China’s technology lists are falling sharply as Beijing shrinks the sector

Chinese technology companies saw stock market value fall more than 60 percent in the second quarter as Beijing regulators spread repression against the sector.

Since the start of April, the first public offering by Chinese technology groups in exchanges around the world has raised only $ 6 billion, nearly two-thirds less than in the first quarter, according to Dealogic data.

As a proportion of all Chinese IPOs, the share of technology listings has also fallen to a two-year low of just over 21 percent of the more than $ 28 billion collected during the period.

The decline of Chinese technology groups He was under pressure from Beijing, which in recent months has stepped up the regulatory review of some of the biggest names in the sector.

Regulators blocked Ant Group’s $ 37 billion IPO, a billionaire-controlled fintech group Jack Ma, in November, and promised business restructured. Authorities have also fined technology groups for a monopolistic practice, including fining Ant Sister Alibaba a e-commerce group recorded $ 2.8 million.

“The regulatory issue in China is more fundamental because it will call into question the valuation they can give to your business – which is especially true for financial technology companies,” said Frank Benzimra, head of Asia Capital’s strategy at Société Générale. “Certainly, that matters a lot to companies looking for an IPO.”

The a sharp decline in technology IPOs in contrast to the excellent first quarter, these groups raised more than $ 15.3 billion from stock sales in Shanghai, Shenzhen, Hong Kong and New York.

Although China’s IPOs rose sharply, the world’s primary and secondary listings hit a record $ 65.4 billion in the first six months of the year, Dealogic data show.

A large part of the drop came to Hong Kong. The city’s exchange hasn’t even picked up a list of mainland China’s technology in the past three months, after making $ 8.6 million in peace revenue in the first quarter.

Louis Tse, chief executive of Wealthy Securities, Hong Kong brokerage, said the decline was due to changes in investors away from high-growth stocks and the decline in Chinese companies. looking for secondary listings in the city.

Last year, Chinese Internet groups traded in the US, including JD.com, NetEase and Baidu has raised billions The number of dollars in Hong Kong has increased as concerns have been raised about downloading in New York. The U.S. enacted the law in December lists the company who do not comply with American audit standards.

“That’s dead. . . After quite a wave of requests for listing in Hong Kong, there are not so many companies left, ”Tes said.

However, Chinese technology IPOs can be translated. Chinese electric vehicle manufacturer Xpeng on Friday he said he would look for a $ 2.3 billion fundraiser on the Hong Kong list with negotiations set to begin next month. Didi Chuxing traveling group It plans to raise $ 4 billion in the coming weeks on the potential NYSE list.

Jason Elder, a law firm partner at Mayer Brown, said the lack of a list of Chinese technology in the second quarter is “unusual and abnormal” in the second quarter, but added that there is no way the pace of early-year lists can move forward forever.

“I don’t think the market is a harbinger of losing its attractiveness or not being open to technology. I see time as an issue,” he said.

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