New rules on overseas listings may jeopardise future US deals for Chinese firms
- Chinese companies’ shares fall on US exchanges after Beijing announces new requirements and a national security review of Didi
- Tech and biotech firms have seen US capital markets as the top destination for their fundraising
The State Council’s rules – which followed news that Beijing has put newly listed Didi Chuxing under national security review – not only helped wipe as much as US$16.4 billion in value off the ride-hailing and tech giant on Tuesday, its fourth day of trading on the New York Stock Exchange, but threaten plans by companies such as medical services provider LinkDoc Technology, which aims to raise US$243 million from US investors.
After pulling Didi from Chinese app stores, China’s Cybersecurity Administration, citing national security, said on Monday that it was also investigating online recruiter Zhipin.com and truck-hailing app Full Truck Alliance after their listings on the US stock market last month.
Zhipin lost 16 per cent in value on Tuesday in New York trading, and Full Truck Alliance was down 7 per cent.
Overall, iShares MSCI China ETF, which tracks a basket of Chinese stocks, has traded down 4.2 per cent since Friday, when the investigation against Didi was announced.