The Clap👏
First, it was tight U.S. audit requirements on U.S.-listed Chinese stocks, now China itself is cracking down on its own companies.
What’s Going On??🧐
A new rule straight outta Beijing has made it more of a hassle to list in other markets if companies decide to delist from U.S. stock exchanges.
The rule applies to internet platform companies with personal data of over one million users but does not apply to companies that already went public (cc: DiDi).
But, Why?🤨
One expert describes this crackdown as Beijing’s way of telling these U.S.-listed Chinese companies to list their shares back home.
Why this Matters🤔
Only about a third of U.S.-listed Chinese companies are reportedly eligible for a dual or secondary listing in Hong Kong.
The rest, well they would need to go private first, before exploring alternative listing options.
Investors were advised earlier this year to reduce their exposure to U.S.-listed Chinese stocks.
