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New York’s stock market is beating Hong Kong and London

BusinessEconomyNew York's stock market is beating Hong Kong and London

In 2006 Charles Schumer and taken to the pages of Michael Bloomberg wall street journal To express his concerns about New York. Both the senator and the mayor feared that the Big Apple was losing its financial edge. After all, it captured only one of the 24 largest initial public offerings (IPOs) of the previous year (IPOS).

The New York Giants have nothing to worry about these days. In the battle between global financial centres, the city is fast becoming a force to be reckoned with. This is especially true when it comes to stock markets, where America’s financial center is looking to expand its already comfortable lead.

On 3 March, a British semiconductor firm owned by SoftBank, a Japanese investment organisation, announced it would list only in New York, rejecting a campaign by British ministers to encourage a London listing. one day before, crh, a London-listed building-materials firm, said it would move its main inventory to New York. Other European countries have also lost. In the same week Linde, a chemical firm that until recently was Germany’s largest component dex Index, while retaining its US listing, dropped Frankfurt.

Chinese companies are also looking west after nearly two years of stagnation. New rules published last month by the country’s securities regulator mean foreign listings will be scrutinized more closely, but they also provide an opportunity for more firms to list overseas. Last month, Hesai Group, a Chinese electronics company, raised $190 million on Nasdaq, the biggest Chinese listing in the US since 2021. Sheen, a fashion firm, is reportedly looking to float its shares in New York. US regulators may be tough on Chinese firms by employing sanctions and export controls, but the Big Apple seems to have retained its charm.

trend reflects the failures of Hong Kong and London, the only stockmarket that could really compete with the New York. In the past four quarters, during which trading was slow, US exchanges won $24 billion overseas IPOThat’s more than eight times that managed by London and Hong Kong (excluding Chinese stocks) combined, according to Dealogic, a data provider. In 2019, by contrast, New York only took three times as many businesses.

Hong Kong’s stock market once generated some attraction for foreign companies including Russian aluminum firm Rusal; Prada, an Italian fashion house; and Samsonite, an American luggage company. But the city’s current listing pipeline includes few companies from outside China. Meanwhile, London has its drawbacks. A common complaint is the lack of a natural base of investors. UK pension funds and insurers invest a particularly small proportion of their assets in domestic shares.

The stock exchanges in Shanghai and Shenzhen are very large, with a combined total market capitalization of over $12 trillion. But the Chinese Communist Party is an ever-present threat, and Chinese stock markets still behave somewhat irrationally. In fact, shares of firms listed on the Mainland and Hong Kong exchanges are about 40% more expensive in the Mainland. Tokyo’s stockmarket is also large, with a total market capitalization of around $5.4 trillion, but manages to attract very little international trading these days.

Other places can’t match the load of the big three. Amsterdam and Dubai have developed, but remain regional, obscure, or both. Singapore, which overtook Hong Kong in last year’s Global Financial Centers Index, compiled by consultancy Z/Yen, is a growing wealth-management centre, but remains a laggard when it comes to stocks. .

As Messrs. Schumer and Bloomberg can attest, financial competition sometimes changes in unexpected ways. Right now, however, New York appears to be the listing venue of choice for companies in the US, Europe, and when authorities on both sides allow it, even China. It is rapidly moving away from the rest of the field.

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