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Showing posts with the label China regulatory crackdown

Wall Street's IPO fee machine under threat after regulatory scrutiny

  The heavier deal flow has provided an uptick in fees to the banks China’s regulatory crackdown threatens to reverse a surge in underwriting fees for US investment banks like  Goldman Sachs Group Inc ., Bank of America Corp. and Morgan Stanley. Companies based in China have been the most prolific foreign issuers of equity in New York during the pandemic. But the budding $50 billion flow of US initial public offerings and secondary stock sales is at risk after new regulatory scrutiny surrounding cybersecurity firms. “China’s increased oversight of overseas listings by Chinese companies, announced by the State Council on July 6, could halt unicorn listings in 2H in Hong Kong and the U.S,” Bloomberg Intelligence analyst Sharnie Wong wrote in a note. “Their combined share of  Chinese IPOs  may drop to less than 40 per cent of deal value in 2H from 55 per cent in 1H, assuming deal value halves sequentially.” Investment banks have raised $49.2 billion in US stock offering...