Beijing urges firms to list domestically

HONG KONG – China’s securities regulator, eager to bolster the country’s bourses, is encouraging Chinese companies looking to raise up to US$1 billion to list locally instead of in Hong Kong, several investment bankers told Reuters.

The move by the China Securities Regulator Commission (CSRC) comes as the country’s long-suffering local markets are surging. It is also to the detriment of global investment banks and the Hong Kong exchange, where IPOs by mainland firms such as Industrial and Commercial Bank of China made Hong Kong the world’s second-biggest market last year for new listings.A CSRC spokesman said he had not heard of such a guideline, but six investment bankers with different firms in Hong Kong said the regulator had placed a priority on Chinese companies listing domestically.”The central government has not issued any black and white policies on this.But our understanding is that CSRC has an internal guideline, that, in general, they are not going to approve Hong Kong listing plans of less than US$1 billion,” said a banker working on several planned Hong Kong IPOs.China resumed domestic IPOs last June after a year-long hiatus, and since then companies have raised US$14,6 billion on the domestic bourses, according to Dealogic, driven mostly by multi-billion dollar offerings by big state companies such as China Life Insurance and Ping An Insurance, which were already listed in Hong Kong.Nampa-ReutersIt is also to the detriment of global investment banks and the Hong Kong exchange, where IPOs by mainland firms such as Industrial and Commercial Bank of China made Hong Kong the world’s second-biggest market last year for new listings.A CSRC spokesman said he had not heard of such a guideline, but six investment bankers with different firms in Hong Kong said the regulator had placed a priority on Chinese companies listing domestically.”The central government has not issued any black and white policies on this.But our understanding is that CSRC has an internal guideline, that, in general, they are not going to approve Hong Kong listing plans of less than US$1 billion,” said a banker working on several planned Hong Kong IPOs.China resumed domestic IPOs last June after a year-long hiatus, and since then companies have raised US$14,6 billion on the domestic bourses, according to Dealogic, driven mostly by multi-billion dollar offerings by big state companies such as China Life Insurance and Ping An Insurance, which were already listed in Hong Kong.Nampa-Reuters