In 2006 Charles Schumer Michael Bloomberg boarded wall street journal Express their concerns about New York. Both senators and mayors worry that the Big Apple is losing its financial edge. After all, the city captured only one of the previous year’s 24 largest IPOs (IPOSecond).
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These days, the rich and powerful in New York have nothing to worry about. The city is increasingly an unstoppable force in the battle for a global financial center. That’s especially true in stocks, where the U.S. financial center is extending its already solid lead.
On March 3, Arm, a British semiconductor company owned by Japanese investment institution SoftBank, announced that it would only be listed in New York, rejecting the activities encouraged by British ministers to list in London. one day ago, crhA building materials company listed in London said it would move its main listing to New York. Other European countries also lost out. That same week, Linde, a chemical company that until recently was the largest in Germany. Dax The index, exiting Frankfurt, continues to be listed in the United States.
After a nearly two-year hiatus, Chinese companies have also set their sights on the West. New rules issued last month by China’s securities regulator mean overseas listings will come under greater scrutiny, but they also provide avenues for more companies to list overseas. Last month, Chinese electronics company Hesai Group raised $190 million on Nasdaq, the largest Chinese listing in the U.S. since 2021. Fashion company Shein is also said to be looking to list in New York. U.S. regulators may be getting tough on some Chinese companies through sanctions and export controls, but New York appears to retain its appeal.
The trend mirrors the failure of Hong Kong and London, the only markets that can really compete with New York.U.S. exchanges raked in $24 billion overseas in last four quarters of sluggish business IPOs, according to data provider Dealogic, is eight times that of London and Hong Kong (excluding Chinese stocks) jointly managed. By comparison, New York saw only three times as much business in 2019.
The Hong Kong stock market used to be somewhat attractive to foreign companies, including Russian aluminum company Rusal, Italian fashion house Prada and American luggage company Samsonite. But the city’s current listing pipeline has few companies from outside China. At the same time, London has its own drawbacks. A common complaint is the lack of a natural investor base. UK pension funds and insurance companies invest a small portion of their assets in domestic stocks.
The stock exchanges in Shanghai and Shenzhen are massive, with a combined market capitalization of more than $12 trillion. But the Chinese Communist Party is an ever-present threat, and Chinese stocks are still behaving somewhat irrationally. In fact, shares of companies listed on the mainland and Hong Kong exchanges are almost 40% more expensive on the mainland. Tokyo’s stock market is also large, with a combined market capitalization of nearly $5.4 trillion, but today manages to attract little international business.
Other places simply cannot match the weight of the Big Three. Amsterdam and Dubai have grown, but are still regional, shady or both. Singapore, which overtook Hong Kong last year in an index of global financial centers compiled by consultancy Z/Yen, is a growing wealth management hub but remains a minnow when it comes to stocks.
As Mr. Schumer and Mr. Bloomberg can attest, the financial race sometimes shifts in unpredictable ways. For now, though, New York appears to be the preferred listing venue for U.S., European and, if officials from both sides allow it, Chinese companies. The city is rapidly moving away from the rest of the field. ■
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