Shanghai-London Stock Link Could Finally Revive After Year Halt

(Bloomberg) -- The Shanghai-London Stock Connect scheme could finally see some traffic after a year’s hiatus.

China Pacific Insurance Group Co., the fourth largest insurance firm by market share in China, on Tuesday got approval from the nation’s securities regulator to sell global depositary receipts in London. The sale could kick off this month, IFR Asia reported.

The stock link has been dormant since broker Huatai Securities Co. raised $1.69 billion a year ago through the sale of GDRs, the only Chinese company to have done so in London. SDIC Power Holdings Co. was set to follow earlier this year but postponed in December, citing “market conditions.” China temporarily suspended the trading link on political grounds, people familiar with the matter previously told Bloomberg, though Beijing denied those claims and said operation continued as normal.

In the works since at least 2015, the Shanghai-London Stock Connect was aimed at giving Chinese companies another venue to raise international capital while helping London retain its clout as a financial center after Brexit. As tensions between Washington and Beijing have mounted, the U.K. stock link could take on added importance.

Chinese firms looking to list overseas and tap international sources of capital have typically headed either for Hong Kong or New York. But in recent weeks the Trump administration has cast a shadow on Chinese companies’ continued access to U.S. capital markets, moving to block a government pension fund from investing in Chinese stocks and promising tougher oversight of their accounting standards.

If CPIC’s London listing, which could raise as much as $2.5 billion, goes well, it may well encourage other companies in the pipeline to come forward.

UPCOMING LISTINGS:

• NetEase Inc.
  • Hong Kong exchange
  • Size up to $2.8b
  • Pricing June 5, listing June 11
  • CICC, Credit Suisse, JPMorgan
• JD.com Inc.
  • Hong Kong exchange
  • Size about $2b
  • Listing expected June 18
  • Bank of America, CLSA, UBS
• Dada Nexus Ltd.
  • Nasdaq exchange
  • Size up to $280m
  • Pricing June 4
  • Goldman Sachs, Bank of America, Jefferies
• Legend Biotech Corp.
  • Nasdaq exchange
  • Size up to $368.5m
  • Pricing June 4
  • Morgan Stanley, JPMorgan, Jefferies
• Burning Rock Biotech Ltd.
  • Nasdaq
  • Size $100m
  • Filed May 22
  • Morgan Stanley, BofA, Cowen & Co., CMBI, Tiger Brokers

More ECM situations we are following:

• Greentown Service agreed to place 266.6m shares at HK$10.18 apiece, according to Hong Kong stock exchange filing.
• China Meidong Auto sells 81m shares at HK$15.84 apiece, raising $165 million, according to terms for the deal obtained by Bloomberg.
• Initial public offerings are back in full swing. Fundraising volume globally is expected to recover to pre-pandemic levels this week with sizable listings by companies including Warner Music Group Corp. and NetEase Inc. set to raise a total of more than $6.4 billion, according to data compiled by Bloomberg.
• Pinduoduo denies report on Hong Kong listing.

See also:

• Asia ECM Weekly Agenda
• IPO data
• U.S. ECM Watch
• EU ECM Watch
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