Initial public offerings (IPOs) on the Hong Kong exchange will decline in the second half of 2021. This is a new consequence of Beijing’s crackdown on its tech companies. This conclusion was made Reutersby interviewing the participants in the transactions.
Investors are on edge as China’s tightening of economic policies has led to uncertainty in the markets.
Most of the IPOs on the Hong Kong Stock Exchange are carried out by Chinese companies. According to Refinitiv, in the first half of this year, IPOs accounted for more than $ 18 billion, which is 13.4 billion more than in the same period last year.
The biggest deal in the second half of the year was supposed to be a $ 7 billion secondary public offering of China Tourism Group Duty Free, but now its future is in question. Analysts and bankers also intend to stop investing before the onset of negative consequences from the actions of the Chinese authorities.
In July, Beijing announced the passage of a law requiring companies with a database of more than a million people to obtain government approvals to go public in other countries. The Chinese leadership fears that third parties from other countries will receive personal data of users.
Against the backdrop of repressive initiatives, ByteDance, which owns the social network TikTok, decided to postpone its IPO indefinitely.
In mid-July, Bloomberg called Beijing’s actions “a blow to the world’s billionaire factory.” The wealth of China’s richest entrepreneurs has plummeted billions of dollars after tightening oversight of big tech businesses.