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CNA
2 days ago
- Business
- CNA
Shein working towards Hong Kong listing after London IPO stalls: Sources
HONG KONG: Shein is working towards a listing in Hong Kong after the online fast-fashion retailer's proposed initial public offering (IPO) in London failed to secure the green light from Chinese regulators, said three sources with knowledge of the matter. The China-founded company aims to file a draft prospectus with Hong Kong's stock exchange in the coming weeks, one of the sources said. Shein plans to go public in the Asian financial hub within the year, two of the sources said. Shein plans to change the listing venue as it has not yet received approval for its London IPO from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), the two sources said. The company, which sells products including US$5 bike shorts and US$18 sundresses, in March secured approval from Britain's Financial Conduct Authority (FCA) for its IPO in London, and soon informed the CSRC, one of the sources said. The company initially expected the green light from Chinese regulators to follow swiftly after the FCA but has since experienced an unexpected delay and limited communication from the CSRC, said the source. Details about Shein's Hong Kong listing plan have not been reported previously. All the sources spoke to Reuters on the condition of anonymity as they were not authorised to speak to the media. Shein and CSRC did not immediately respond to Reuters' request for comment. A spokesperson for Hong Kong Exchanges and Clearing Ltd (HKEX) declined to comment on individual companies. Before its attempt to list in London, Shein had pursued a listing in New York, as part of its efforts to gain legitimacy as a global, rather than a Chinese company, and access to a wide pool of large Western investors. A listing in Hong Kong would go against that strategy and could hurt its global credentials. Allegations that Shein's products contain cotton from China's Xinjiang region and a planned legal challenge to the London IPO by a non-governmental organisation campaigning against forced labour in China have complicated the London listing and risk embarrassment for the Chinese government, a separate source with direct knowledge of the matter said. Tensions with the US over trade only exacerbate the wariness of Beijing and the CSRC, the source said. The US and non-governmental organisations accuse China of human rights abuses in the Xinjiang Uyghur Autonomous Region, where they say Uyghur people are forced to work producing cotton and other goods. Beijing has denied any abuses. Shein, founded by China-born entrepreneur Sky Xu, says it has a zero tolerance policy for forced labour and child labour in its supply chain. The company moved its headquarters from Nanjing, China, to Singapore in 2022. As it awaited a response from the CSRC, Shein earlier this month dropped the communications firms Brunswick and FGS it had hired to help with public relations ahead of the London listing. "MORE TO DO WITH CHINA THAN LONDON" Reuters could not determine if Shein had sought or received a nod from the CSRC for the Hong Kong listing. The company had sought Chinese regulatory approval to go ahead with processes to list in New York and later in London. Shein's filings with the CSRC make it subject to Beijing's listing rules for Chinese firms going public offshore, two sources have said. The rules are applied on "a substance over form" basis, giving the CSRC discretion on when and how to implement them, the sources added. Shein does not own or operate any factories, instead sourcing its products from 7,000 third-party suppliers in China as well as some factories in other countries like Brazil and Türkiye. The company had aimed to go public in London in the first half of this year. "Shein's listing would have been a boost to the market," said Alasdair Steele, corporate partner with law firm CMS. "However, there was never any guarantee that a single large listing would reignite the IPO market." "The Shein news is much more to do with China than London," said Lisa Gordon, chair of investment bank Cavendish and a member of the Capital Markets Industry Taskforce (CMIT) - a group dedicated to the revival of Britain's markets. "The London market is in a very good position." This is not the United Kingdom capital's first major IPO loss this year. In February, Unilever said it had chosen Amsterdam for the main listing of its ice cream business. That follows a string of London-listed companies moving, such as online betting company Flutter. Others, such as Shell, are considering leaving as well. BUSINESS MODEL DISRUPTION Shein's business model of sending products straight from factories to shoppers around the world was disrupted by the Trump administration ending duty-free access and slapping steep tariffs on e-commerce packages from China. The "de minimis" exemption allowed e-commerce packages from China worth less than US$800 to enter the US duty-free and helped Shein, Temu and Amazon Haul sell clothes, gadgets and accessories extremely cheaply. Now, those parcels are subject to a minimum tariff of 30 per cent. Regardless of where Shein lists, its eventual IPO valuation will hinge on the impact of the removal of the de minimis exemption, the sources have said. The US exemption is still in place for goods that are not from China or Hong Kong. The European Union has also proposed changes to its duty exemption on parcels under €150, adding to pressure on the business model. Reuters reported in February that Shein was set to cut its valuation in a potential London listing to around US$50 billion, nearly a quarter less than the US$66 billion valuation it had achieved in a US$2 billion private fundraising in 2023. A revival in Hong Kong's capital market, with sizable recent listings including Chinese electric vehicle battery giant CATL's US$5.3 billion float, the world's largest listing this year, augurs well for a potential Shein IPO in the city. Companies have raised US$9.7 billion in Hong Kong through IPOs and second listings so far in 2025, compared to US$1.05 billion at the same time last year, according to LSEG data.
Zawya
06-05-2025
- Business
- Zawya
Dubai nears top 4 global financial hub status as DFM foreign investor participation hits 85%: HSBC report
Dubai's bond and sukuk market hits $142 billion in Q1 2025 Dubai, UAE: According to a new report launched by HSBC in the UAE, Dubai's capital markets are playing a pivotal role in advancing the Emirate's ambition of becoming a global top 4 financial hub, with foreign investor participation now a defining feature of market activity. Unveiled at the Capital Market Summit 2025, hosted by Dubai Financial Market (DFM), 'Strategy to Scale: Dubai's Blueprint for Capital Market Growth' report unpacks how the fast-moving internationalisation of its equity and debt capital markets combined with an expansive structural reform agenda are bringing Dubai closer to its goal of being recognised among the world's top financial hubs, as outlined under D33 economic vision. The deep analysis, conducted in partnership with Dubai Financial Market (DFM), is designed as a guide for new investors entering the market. Mohamed Al Marzooqi, CEO, UAE, HSBC Bank Middle East said: 'The sheer pace of change driving Dubai's capital markets growth requires consistent and clear guidance for new investors, particularly as an accelerating influx of institutional capital from right across the investment spectrum seeks to navigate and harness the region's dynamic opportunities. This guide will help new issuers and investors understand how Dubai's openness to global capital and talent, its best-in-class infrastructure, and innovation are creating opportunities.' The report explores the broadening and internationalisation of its equity capital markets, including potential enhancements to secondary market deal flow and liquidity, and the technological initiatives to strengthen the financing ecosystem: Between 2016 to 2024, the DFM provided investors with higher returns than the broader MSCI EM Index, achieving a 4.9 annualised US dollar return compared to 2.8% for the broader emerging markets index. Foreign investors accounted for half of all trading on the DFM at the end of 2024 and represented 85% of all investors that registered with DFM in 2024, reflecting Dubai's international appeal. In 2024, the number of wealth and asset managers operating in Dubai International Financial Centre (DIFC) rose 16% year-on-year to 410, including 75 hedge funds of which 48 have more than US$1 billion under management, underscoring the changing shape of international investors. In 2024, Dubai accounted for 2.2% of global IPO volumes and hosted the world's largest tech IPO of the year - for on-demand food, grocery and retail delivery platform, Talabat. Samer Deghaili, Co-Head of Investment Banking, Middle East, North Africa and Türkiye, HSBC, said: 'Dubai has opened up new pathways for issuers and investors across equity and debt capital markets. IPOs have been enjoying strong, often record-breaking demand, while its leading DCM hub status is providing an expanding universe of issuers with comprehensive options to raise funding in both foreign and the local currency.' According to the report, Dubai's debt capital markets are not only flourishing for its own credit universe, but for the world's, underpinned by an expanding DCM universe of local and international issuers. With one of the most developed debt capital markets in the MENA region, Nasdaq Dubai's growth as a global listing venue is encouraging more international issuers to bring deals to the Middle East, especially from Asia: Chinese corporations are increasingly turning to Dubai, with over $22 billion in debt on the exchange at the end of 2024. Dubai's attractiveness as a listing destination is underscored by the fact that non-UAE fixed income issuers accounted for a full 45% of fixed income listings outstanding on the exchange in 2024. The UAE credit universe also had an active 2024, ranking as the third-largest dollar debt issuers from the emerging markets (excluding China). Last year saw the value of outstanding Sukuk listed across Nasdaq Dubai and DFM reach $97.8 billion. Sukuk issuance across all currencies rose 42% year-on-year to $4.71 billion in Q1 2025, accounting for 76% of all debt capital market activity on Nasdaq Dubai during the period. The paper also explores the development of market infrastructure, including its digitalisation, upon which DFM and Nasdaq Dubai operate to cater to local, regional and international market participants, across retail and institutional segments. Deghaili continued: 'At HSBC, we pride ourselves on being a bridge between international capital and the burgeoning opportunities in the UAE. Our deep-rooted presence in the region, combined with our global network, enables us to connect investors with the UAE's evolving investment landscape. As the region continues to open up and diversify, we're committed to facilitating these connections and supporting our clients' ambitions.' HSBC is the leading international bank in the UAE and has led on 65% of total IPO deal value in the UAE's financial markets between 2022 and 2025 year-to-date. During 2024, HSBC was a Joint Global Coordinator on two of DFM's three IPOs and broke new ground for the market with the inclusion of a stabilisation mechanism as part of Parkin's privatisation. HSBC is the leading DCM arranger for Dubai issuers right across the sector and ratings spectrum and is the only international bank to have led all debt capital market transactions from the Federal Government of the UAE. As part of its efforts to support structural innovation in the capital markets, in 2024 HSBC was Joint Lead Manager for the world's first Sustainability-linked Loan Financing Bond to fully adhere to the new International Capital Market Association (ICMA) and Loan Market Association (LMA) framework, for Emirates NBD Bank. To read the report, please click here. Media enquiries to: Ahmad Othman ahmadothman@ +971503069313 HSBC in the MENAT region HSBC is the largest and most widely represented international banking organisation in the Middle East, North Africa and Türkiye (MENAT), with a presence in nine countries across the region: Algeria, Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia, Türkiye and the United Arab Emirates. In Saudi Arabia, HSBC is a 31% shareholder of Saudi Awwal Bank (SAB), and a 51% shareholder of HSBC Saudi Arabia for investment banking in the Kingdom. Across MENAT, HSBC had assets of US$73bn as at 31 December 2024.
