Just months after bankers celebrated a record haul from taking Chinese companies public in New York and Hong Kong, they¡¯ve had a rude awakening. Deals are being shelved and investors are nursing heavy losses.
A chill has settled over global finance after a fortnight in which China first cracked down on its Uber-like Didi Global Inc. within days of a U.S. trading debut, followed swiftly by the State Council announcing closer scrutiny of all offshore listings. On Saturday, a cybersecurity review was proposed for companies with data on more than 1 million users before they seek to list in foreign countries.
The warning signs had been flashing for a while. As underwriters totted up a record $1.5 billion in fees last year from helping Chinese firms with initial public offerings offshore, relations between China and the U.S. were at a low ebb. In December, then-U.S. President Donald Trump signed a bill that could delist Chinese companies that don¡¯t meet audit inspection rules. Simultaneously, Chinese President Xi Jinping stepped up oversight of big technology firms, partly to secure the treasure trove of data they control.
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