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Banking & finance
BusinessBanking & Finance

Wall Street banks’ IPO fees could come under pressure from mainland rivals if Beijing forces tech firms to list in Hong Kong

  • New rules on foreign listings by Chinese tech companies could shift more IPOs to Hong Kong
  • Top Wall Street banks split US$350 million in fees from Chinese listings in the US in the first half

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US investment banks pulled in a big haul of IPO fees from Chinese firms listing in New York in the first half. Photo: AP Photo
Chad BrayandEnoch Yiu

Some of Wall Street’s biggest banks could potentially lose hundreds of millions of dollars in lucrative investment banking fees if China’s new rules on foreign listings force tech unicorns to list closer to home in Hong Kong, according to deal makers and analysts.

A half-dozen American banks, including Citigroup, Goldman Sachs and JPMorgan Chase, as well as Swiss banking giants Credit Suisse and UBS, split more than US$350 million in fees as Chinese companies raised an eye-popping US$12.5 billion through initial public offerings in New York in the first half of this year, according to financial data provider Refinitiv.
By comparison, these lenders enjoyed a much more modest cut of fees from IPOs in Hong Kong in the first half, with the league table dominated by the likes of mainland-backed players China International Capital Corp (CICC), Industrial and Commercial Bank of China (ICBC) and Futu Securities International, according to Refinitiv.
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While Morgan Stanley and Goldman Sachs were among the top five lenders in Hong Kong, their fees in Hong Kong were smaller than their US hauls.

“If the mainland tech companies opt for coming to Hong Kong instead of the US for listing, US investment banks are set to face higher competition from their Hong Kong counterparts,” said Johnny Lam, deputy president of CPA Australia’s Greater China region, an accounting industry body.

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China kicks off antitrust probes into Alibaba over alleged monopolistic practices

China kicks off antitrust probes into Alibaba over alleged monopolistic practices
On Saturday, China’s top cybersecurity regulator unveiled draft rules under which it would review any foreign listings by technology platform companies that possess the data of at least 1 million users.
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