In the Hutong
Heading to Shanghai
As I have noted here and in Euromoney Magazine, we are witnessing the beginning of an important shift for Chinese enterprises and the way they are financed. A growing number of Chinese businesses that have listed overseas, especially mid-sized and growing companies, are quietly de-listing from the NYSE and NASDAQ.
Adam Gefvert offers two more examples of this delisting trend at Seeking Alpha, China Medical Technologies and ZST Digital Networks, and offers a description of how they are doing so by hiring proxies to purchase shares on their behalf.
Leaving aside questions of propriety or legality of this process, it offers an important insight. While the Chinese companies that have listed in the U.S. did so with great fanfare, they will most likely depart quietly, attracting as little attention as possible. I suspect we will wake one morning and find that NYSE and NASDAQ no longer boast a bevy of mid-sized Chinese stocks.
Why is this important? For Chinese companies, it means that they will focus on listing in places where their value is understood by the common punter. For the small investor, participating in China’s economy will become more difficult.
- David Wolf on China’s Equity Markets (wolfgroupasia.com)
- Can U.S. and China Avert Accounting Armageddon? (businessinsider.com)