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A Financial Times review shows that a record number of companies have canceled their plans to list on Star Market, the Nasdaq’s Chinese high-tech competitor on Wall Street.
The market opened in 2019 and is under the Shanghai Stock Exchange.
At the time, 140 companies were lining up to list, but since November last year, 180 companies have canceled their plans to enter the Star Market. In March alone, 76 companies withdrew.
The reason is the increasing public control of technology companies in the wake of Ant Group’s attempt to go public.
“Star Market was really meant to be a step in the direction of reform, what is happening now is not,” analyst Fraser Howie told the Financial Times on development.
After Jack Mas Ant Group was prevented from listing, Chinese tech companies report increased public scrutiny. This has led more people to leave their listing on the Star Market. (Photo: STRINGER / Reuters / NTB Scanpix)
2,300 companies await the Chinese stock exchange
Star Market aims to be a stock exchange for companies dedicated to technology and science.
The original idea was that it should be easier and faster for companies to list on this market than on traditional stock exchanges. Among other things, companies should not be required to be profitable.
Now it may seem that the wind has changed. Zhejiang Qizhi Technology is among those who have delisted, and the company claims that increased control is the reason for this.
The company is said to have received 28 screening questions on everything from valuation to whether the company relied too heavily on its top five customers to make money.
The fact that the listing has become more complicated means that it also takes time, and the costs associated with it are also higher, which means that more and more companies are leaving.
According to East Money Information, 2,300 companies are waiting to go public in China.
Ant Group controversy
Expectations were high for Ant Group’s listing on the stock exchange in November last year. Valued at $ 313 billion, it would have been the largest in the world. Jack Ma, the technology founder who has become known and prosperous on Alibaba, owns a third of the company.
The official reason for the delisting was Chinese regulators’ concern that it could destabilize and threaten China’s financial and technological system.
However, Yi Giang of the Bank of China stated in January this year that the listing could still be completed, if Ant Group gets rid of the legal tangles that impeded the company for the first time.
Wall Street Journal sources speculated that President Xi Jinping feared that Ma and the Ant Group’s top management would gain too much power and pose a political threat.
In connection with the cancellation of the list, Jack Ma also disappeared from the public eye. A great spate of rumors began, until he made his first public appearance in January of this year. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content can only be done with written permission or as permitted by law. For more terms, see here.
