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Goldman’s top banker says many Chinese IPO clients considering shift to Hong Kong from US exchanges

  • The tap has not been turned off for US listings but ‘balance of activity’ is coming to Hong Kong, regional investment banking co-head Drayton says
  • Hong Kong ranks third for global IPOs and secondary listings, behind Nasdaq and the NYSE so far this year, according to Refinitiv

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Iain Drayton, Goldman Sachs co-head of investment banking for Asia Pacific excluding Japan, said more Chinese companies are gravitating to Hong Kong as a listing venue. Photo: K.Y. Cheng
Chad Bray
More than half of Goldman Sachs’s pipeline of Chinese companies pursuing initial public offerings in the US are considering shifting their listings to Hong Kong, amplifying a trend of firms seeking to raise funds closer to home, according to one of its top bankers in Asia.
Increased geopolitical tensions between the US and China, combined with regulatory tightening by both Beijing and Washington this summer and weaker institutional investor sentiment for American listings by Chinese firms, is tilting the consideration in favour of the Hong Kong stock exchange, said Iain Drayton, co-head of investment banking for Asia excluding Japan.

“While the US will continue to be very attractive for Chinese companies, due to all of these factors, Hong Kong stands to benefit and already has,” Drayton, who is based in Hong Kong, said in an interview with the Post. “The trend will continue.”

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Hong Kong ranked third globally for new stock offerings and secondary listings this year through October 29, with US$38.02 billion of proceeds, according to financial data provider Refinitiv. Nasdaq topped the league table with US$76.6 billion, followed by the New York Stock Exchange (NYSE) with US$52.2 billion.

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The Shanghai Stock Exchange and its Star Market ranked a close fourth with US$36.9 billion in proceeds. The Star Market is expected to host the biggest IPO globally this year when Syngenta Group, the Swiss agrichemicals giant owned by state-backed China National Chemical Corporation (ChemChina), goes public.
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