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Citing key parties, including lawyers, bankers, accountants and regulators, involved in what has been a major capital-raising route, Reuters reported that the Chinese companies are calling off plans for US listings as tensions between the world’s top two economies escalate.

Stephen Chan, a partner at law firm Dechert LLP in Hong Kong, noted: “We have seen clients putting their U.S. IPO plans on hold for now. The underlying reason for the slowdown is the relationship between the U.S. and China. If tensions between the two nations remain, we would expect the slowdown to continue.”

US-China relations have been hampered in recent months, in the face of Beijing’s COVID-19 mishandling and the proposed national security law for Hong Kong. 

Market reaction

A sense of caution prevails amid a lack of fresh catalysts, with the above headlines only adding to the grim tone, as markets remain unnerved heading into the FOMC monetary policy decision due later on Wednesday.

AUD/USD is back in the red just above 0.6950 amid poor Chinese inflation data and weaker commodities prices.

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