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Hong Kong Faces New Threat as Chinese Companies Reconsider IPOs

  • Several firms may shift share sales to U.S., bankers say
  • Protests have undermined Hong Kong’s reputation for stability
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Drew Bernstein of Marcum Bernstein & Pinchuk LLP discusses how the protests are affecting Hong Kong’s IPO market.(Source: Bloomberg)

Several Chinese companies are rethinking fundraising plans in Hong Kong as anti-government protests rock the city, an ominous sign for its future as a financial gateway between Asia’s largest economy and the rest of the world.

One company scrapped preliminary preparations for a $500 million initial public offering in Hong Kong partly because of the unrest and will instead pursue a U.S. listing, according to a senior banker on the deal, who asked not to be named discussing private information. Another banker said at least two companies are considering the same move for IPOs worth a combined $1 billion, adding that final decisions will depend on market conditions and whether the turmoil in Hong Kong eases.