China-Australia relations: Covid-19 probe spat adds to tiny capital pool to make Down Under the no-go market for Chinese IPOs

Relations have frayed after Australian Prime Minister Scott Morrison called for an independent investigation into the origins of the novel coronavirus

But even before tensions arose over the pandemic, Chinese companies were not opting for Australian listings because the market lacks liquidity

Reading Time:3 minutes

The last listing by a Chinese company on the Australian Securities Exchange (ASX) was in 2017. Photo: Shutterstock

Published: 7:30am, 21 Jan 2021Updated: 10:46pm, 21 Jan 2021

Chinese companies raised a record US$281.6 billion from stock markets worldwide last year – but none of it was from Australia.

China buys about a third of Australia’s annual exports and is its biggest trading partner. The Australia Stock Exchange (ASX) was among the first overseas exchanges to host Chinese companies after they were allowed to list overseas 27 years ago.

But relations have frayed after Australian Prime Minister Scott Morrison called for an independent investigation into the origins of the novel coronavirus. Beijing has since suspended imports of Australian barley, beef and lobster, and slapped tariffs on Australian wine.

And ASX and Australian financial professionals have missed out on the record new listings by Chinese companies, whose fundraising worldwide last year was 90.4 per cent higher than 2019, according to Refinitiv data. Hong Kong, Shanghai, Shenzhen and markets in the United States got the lion’s share, while Australia got none.

But even before tensions arose between Beijing and Canberra over the pandemic, Chinese companies were not opting for Australian listings because its market lacks liquidity.

Relations between Beijing and Canberra have frayed after Australian Prime Minister Scott Morrison called for an independent investigation into the origins of the novel coronavirus. Photo: EPA-EFE

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