Beijing Stock Exchange could be alternative to SPAC listings by innovative Chinese tech companies, trade group says

Name: SPACs: Everything you need to know about the finance world’s new big thing
Uploaded: 2021-09-14T00:30:23.000Z
Duration: 3 min 34 s
Description: SPACs: Everything you need to know about the finance world’s new big thing

Proposed Beijing Stock Exchange to focus on innovative small and medium-sized enterprises

Appetite for SPAC deals with Chinese companies low after Beijing’s crackdown on technology firms, sponsors say

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The Chinese flag flutters in Tiananmen Square, Beijing. President Xi Jinping last week announced a new stock exchange to be based in China’s capital. Photo: Reuters

Chad BrayandPeggy Sito

Published: 8:30am, 14 Sep 2021Updated: 8:42am, 14 Sep 2021

A new bourse planned for Beijing could be a potential alternative for up-and-coming Chinese technology firms that might consider going public via special purpose acquisition companies (SPACs), particularly as China places greater scrutiny on overseas listings in the sector, according to an influential trade group and market observers.

Unveiled by Chinese President Xi Jinping last week, the Beijing Stock Exchange is expected to carve out a group of innovative companies from the National Equities Exchange and Quotations (NEEQ) board, also known as the New Third Board. The initiative is part of China’s efforts to boost its domestic capital markets and expand financing access to small and medium-sized enterprises (SMEs), while reducing debt levels.

Chinese officials hope the new bourse, which would target SMEs, could ultimately become the preferred venue for initial public offerings of promising, early-stage tech firms and allow Chinese investors to benefit from the development of new home-grown tech titans.

“There are many factors that affect the IPO decision-making when companies decide their listing venues and the options to go public,” said Estella Kuo, secretary of the Zhongguancun Listed Companies Association, a trade group representing more than 400 listed and unlisted companies in China, mostly based in Beijing.

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SPACs: Everything you need to know about the finance world’s new big thing

“The Beijing Stock Exchange will give a good choice to them. Companies in Zhongguancun will definitely take advantage of this opportunity [along with SPACs].”

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