Syngenta’s US$9.26 billion IPO seen as ‘huge feather in the cap’ to lure foreigners to China’s market, analysts say

The 65 billion yuan (US$9.26 billion) offering is expected to boost foreign fund interest in China’s onshore equities market

The listing will be a ‘huge feather in the cap’ of Chinese equity markets and exchanges, says an analyst

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Women stand in front of the Shanghai Stock Exchange Building in Shanghai on April 3, 2023. Photo: EPA-EFE

Published: 8:30pm, 22 May 2023

Syngenta Group’s planned 65 billion yuan (US$9.26 billion) initial public offering (IPO), potentially the world’s biggest this year, is expected to boost foreign fund interest in China’s onshore equities market.

The Switzerland-based seed giant had its listing application accepted on Friday to move ahead with an offering on the main board of the Shanghai Stock Exchange (SHEX). Its Chinese owner is resuming a plan that stalled in March after the bourse abruptly cancelled a hearing for a debut on the smaller, tech-focused Star Board.

Shifting Syngenta’s IPO to the main board “makes sense as it provides access to a more mature market and larger liquidity base,” said Ben Harburg, managing partner at Magic Stone Alternative Investment in Beijing. The listing of the Swiss firm matches China’s drive to attract capital through regulatory improvements and investment vehicles such as qualified foreign investors, he added.

Traditionally, IPOs on Chinese exchanges have been mostly focused on domestic investors, which has limited the potential investment pool. Sinochem Holdings, a Chinese state-owned company and Syngenta’s owner, had discussed a potential reduction in the fundraising size with Chinese authorities to mollify concerns that a large offering could put pressure on liquidity in the market, Bloomberg reported last month.

Syngenta Group’s global headquarters in Basel, Switzerland. Photo: Handout

“The case is intriguing and all eyes are on the SHEX’s approval process and the success of the IPO,” said Jason Hsu, chief investment officer at Rayliant Global Advisors. “SHEX and Beijing want to see a success story here. Beijing wants more global firms to list on Chinese stock exchanges. This will further legitimise China as a viable money centre.”