Trump’s idea to ban Chinese listings won’t upset Asian exchanges
It might not happen, but if the US president were to stop Asian firms listing in the US, it would help a sector that has watched business slip through its fingers.
Reports emerged last week that Donald Trump was considering a ban on Chinese companies listing on US exchanges, as the next escalation of the US-China trade war.
We doubt it will happen.
Nasdaq, for one, has been quick to pour scorn on the idea, and to point out it is US institutions that would lose out from such a measure.
However, the reports were sufficient to undermine US markets, and in particular US-listed Chinese tech stocks such as Alibaba.
One constituency won’t mind the rumour at all: Asia-Pacific stock exchanges.
For years, the flight of leading Chinese companies to the US, bypassing homegrown bourses in Asia, has been a bugbear to Asian stock exchange executives, particularly in Hong Kong.
When Alibaba skipped Hong Kong and went straight to the New York Stock Exchange for its international listing, the fallout was so severe that Hong Kong Exchanges and Clearing compromised their own governance standards to avoid it happening again, allowing dual class shares for the first time, as the NYSE does.
There is a considerable gap between the floating of an idea and it happening, but there is a serious point here: trade wars aren’t just about trade but the movement of capital
Doing so allowed Hong Kong to capture the Xiaomi listing, though at some cost to the exchange’s own principles.