IIn 2006 Charles Schumer and Michael Blumberg to File Pages Wall Street Journal to express their concerns about New York. Both the senator and the mayor feared that the Big Apple would lose its financial advantage. After all, it grabbed just one of the 24 biggest initial public offerings in the past year (ipos).
Not to worry about the bigwigs in New York these days. In the battle between the world’s financial centers, the city is increasingly becoming an unparalleled force. This is especially true when it comes to the stock markets, as America’s financial center extends its already comfortable lead.
On March 3 Arm, a British semiconductor company owned by SoftBank, a Japanese investment firm, announced that it would only list in New York, rejecting a campaign by British ministers to encourage a London listing. a day ago , crhThe London-listed building materials company said it would move its main listing to New York. Other European countries also lost. In the same week, Linde, a chemical company that until recently was Germany’s largest component Dax index, left frankfurt while retaining its inclusion in america.
After a hiatus of nearly two years, Chinese companies are also looking to the West. New rules published by the country’s securities regulator last month mean overseas listings will be scrutinized more closely, but they also provide a way for more companies to list overseas. Last month, Hesai Group, a Chinese electronics company, raised $190 million on Nasdaq, the largest Chinese listing in America since 2021. Shein, a fashion company, is reportedly looking to go public in New York. US regulators may be cracking down on Chinese companies, by applying sanctions and export controls, but the Big Apple appears to have retained its appeal.
This trend mirrors the failures of Hong Kong and London, the only stock markets that can truly rival New York. In the past four quarters, during which business has been sluggish, US stock exchanges have earned $24 billion offshore ipos, eight times as much as managed together by London and Hong Kong (excluding Chinese stocks), according to Dealogic, a data provider. In 2019, by contrast, New York accounted for only three times as much business.
Hong Kong’s stock market was once a bit of an attraction for foreign companies, including Russia’s Rusal Aluminum. Prada, an Italian fashion house; and Samsonite, an American luggage company. But the city’s current pipeline of listings contains a handful of companies from outside China. Meanwhile, London has its own shortcomings. One common problem is the lack of a natural investor base. British pension funds and insurance companies invest a remarkably small proportion of their assets in domestic equities.
The stock exchanges in Shanghai and Shenzhen are enormous, with a combined total market capitalization of more than $12 trillion. But the Chinese Communist Party is always a threat, and Chinese stock markets are still behaving somewhat irrationally. Indeed, the stock prices of companies listed on the mainland stock exchanges and the Hong Kong Stock Exchange are nearly 40% higher than on the mainland. The Tokyo stock market is also big, with a total market capitalization of nearly $5.4 trillion, but these days it manages to attract very little international business.
Other places simply can’t match the heft of the Big Three. Amsterdam and Dubai have grown, but they remain regional, obscure, or both. Singapore, which overtook Hong Kong in the Global Financial Centers Index last year, compiled by advisory firm Z/Yen, is a growing wealth management hub, but it’s still small when it comes to equities.
As Messrs. Schumer and Bloomberg can attest, financial competition sometimes changes in unexpected ways. Right now, New York seems to be the preferred place to list companies in America and Europe, and when officials on both sides allow it – China too. It is rapidly moving away from the rest of the field. ■
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