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Nasdaq stated that IPOs by Chinese companies could pick up 'dramatically' as delisting anxieties find comfort

Nasdaq stated that IPOs by Chinese companies could pick up 'dramatically' as delisting anxieties find comfort

September 30, 2022: -The Nasdaq expects more Chinese companies to list on the U.S. exchange in the future, as Beijing and Washington appear much nearer to resolving an audit dispute.

“We still have a strong pipeline as things are getting to become a little clearer in that market. We think that that market could pick up dramatically,” said Bob McCooey, vice chairman of Nasdaq, on Wednesday.

The market for Chinese starting public offerings is “pretty much down” in light of the Holding Foreign Companies Accountable Act and the noise around Chinese ride-hailing giant Didi Chuxing, he told “Street Signs Asia.”

The delists risk for U.S.-listed Chinese companies has heavily increased following the Holding Foreign Companies Accountable Act signing in late 2020.

The law permits the U.S. Securities and Exchange Commission to kick Chinese companies off American stock exchanges if American regulators cannot review company audits for three years.

Chinese ride-hailing giant Didi announced plans to delist from the New York Stock Exchange in late 2021, just six months after its U.S. IPO, fueled investor concerns. Didi was the prime attention to a cybersecurity probe from Chinese regulators soon after its IPO. Didi also encountered an investigation by the U.S. Securities and Exchange Commission.

A few 30 Chinese companies went public on the Nasdaq in the first half of 2021, McCooey stated.

In contrast, only two Chinese companies were listed on the Nasdaq in the second half of that year. According to data analysis from the U.S.-China Economic and Security Review Commission , one Chinese company wanted the exchange from January to March this year.

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