China Crackdown Pushes Hong Kong Out of Top Three IPO Venues

Hong Kong has been replaced by Shanghai in the world’s top three venues for stock listings as crackdowns in China’s private sectors continue to hurt investor sentiment.

Shanghai took over third place after raising $45.6 billion in new initial public offerings (IPOs) so far this year, just behind Nasdaq and the New York Stock Exchange, according to data compiled by Bloomberg. Hong Kong, meanwhile, lagged with $37.8 billion.

The first six months of the year was strong for the Hong Kong Stock Exchange (HKEX), having seen the highest IPO haul during the first half period with 128 percent annual growth. That is about $27.6 billion raised through IPOs.

However, tightened regulations in various sectors as imposed by Chinese President Xi Jinping’s “common prosperity” vision has slowed down business activities and caused major delays in new IPOs.

“HKEX had a strong first nine months of 2021, despite a turbulent macro backdrop,” said CEO Nicolas Aguzin in the latest earnings report from HKEX.

During the third quarter, HKEX had raised only $6.2 billion — 40 percent less than last year — as IPOs have dried up and companies have either reduced their offerings or canceled them completely.

Meanwhile, Shanghai is set to open what is potentially the world’s largest IPO this year as it seeks to sell $10.2 billion of shares for Swiss agrichemical company Syngenta Group.

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