Rising interest rates and fears of a recession have lowered listing activity in Western countries so far in 2022. If we turn our gaze to the East, and more specifically to China, the mood is quite different. Here, so far in 2022, a new record was set for funds raised through IPOs, according to Bloomberg.
Chinese-listed companies have recently raised over $57 billion so far this year. Of those, there have been five listings worth over $1 billion since January, with around six expected to list on the exchange soon. If we measure this against other large trading platforms, there has been only one such listing in both the New York and Hong Kong stock exchanges, while in London there has not been a single listing worth over $1 billion in this period.
According to Bloomberg, the high listing activity can partly be attributed to the very investor-friendly monetary policy of the country’s central bank. Moreover, the media house wrote that the increase in stock market listings may also be influenced by concern that economic conditions in China will worsen later this year, with lower expectations of economic growth among the country’s top managers.
Shen Meng, director of investment bank Chanson & Co.
As companies rush to go public, China’s share of global IPO revenue has more than tripled to 44 percent this year, from 13 percent by the end of 2021. And while China’s CSI 300 index has fallen nearly 16 percent since Dec. 31 The shares of the newly listed companies rose by 43 percent. Ke Yan, head of research at DZT Research in Singapore, believes the price hike can be justified by a collective Chinese desire to isolate the country’s economy.
The unique thing among Chinese investors is national trade. It is natural to buy stocks that help China become more independent from the rest of the world.”
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