A new stock exchange being planned for Shanghai ran into unexpected headwinds last week, when signals coming from Beijing hinted at delays or even a possible scrapping of the board aimed at fostering emerging industries. Observers said the setback could deal a blow to fast-growth companies like Baidu-linked (Nasdaq: BIDU) online video service Qiyi.com and Alibaba’s (NYSE: BABA) Ant Financial, depriving them of an important source for new funding to fuel their development.
But the truth is that China already has two major specialty boards to complement its two main boards in Shanghai and Shenzhen. One of those, the ChiNext, is a Nasdaq-style enterprise board launched in Shenzhen in 2009. The other is a 3-year-old Beijing-based over-the-counter style board, often called the Third Board. The older ChiNext specializes in more mature high-growth start-ups, many of which would have previously gone overseas to list, while the Third Board focuses on earlier stage companies that are often still losing money. Read Full Post…
Bottom line: Focus Media will re-list with a high valuation on a new enterprise-style board set to launch in Shanghai next year, while China Renaissance’s new fund to help US-listed firms privatize will attract strong investor interest.
Focus Media changes IPO re-listing plan
A couple of items are in the news involving the recent buyout wave for US-listed Chinese companies, which are rapidly abandoning New York in search of higher valuations in their home market. In an abrupt and somewhat surprising shift, Focus Media, one of the first companies in this homecoming wave, is reportedly abandoning its original plan for Shanghai.
The second item has China Renaissance, a well-respected domestic private equity firm, preparing to raise a major new fund that will help to finance privatizations of Chinese firms from New York. This particular deal looks significant, since many of the nearly 3 dozens firms to announce privatization plans this year could soon need new funding if previous commitments collapse due to recent volatility in China’s domestic stock markets. Read Full Post…
