Reaction to Didi Global plans to pull out of New York


The logo of Chinese rideshare giant Didi’s app is seen through a magnifying glass on a computer screen showing binary digits in this illustrative photo taken on July 7, 2021. REUTERS / Florence Lo / Illustration

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Dec. 3 (Reuters) – Here are reactions to transit giant Didi Global’s (DIDI.N) decision to pull off the New York Stock Exchange and continue listing in Hong Kong, succumbing to pressure from concerned Chinese regulators through data security.

Didi clashed with Chinese authorities in continuing its $ 4.4 billion U.S. IPO in July, despite being asked to put it on hold while a review of its data practices was being conducted. Read more

SHIFARA SAMSUDEEN, LIGHTSTREAM RESEARCH ANALYST, POSTING ON THE SMARTKARMA RESEARCH PLATFORM:

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As expected, Didi will first remove its shares from the NYSE and begin filing a listing application on HKEX. The company is already the subject of a class action lawsuit in the United States and we believe Didi will repurchase its shares at the same IPO price of US $ 14 per share. However, it may not be able to re-list its shares in Hong Kong at the same price (rather at a lower price) given that the state will exercise strict control over its use of the user’s personal data (which will put it at a disadvantage) and location-related issues such as liquidity etc.

“Beijing is also sending a warning to the entire Internet industry in China to be prepared to face more regulations and is likely to keep foreign investors away from Chinese tech stocks for some time.”

ZHAN KAI, LAWYER AT EAST & CONCORD PARTNERS, SHANGHAI:

“Technically speaking, Didi’s US list did not comply with Chinese data security regulations.

“From a political point of view, China and the United States have so far failed to reach an agreement on the supervision of listed companies in the United States. Apparently, the Chinese government is hoping that companies can choose Hong Kong as their listing location.

WANG QI, CEO OF FUND MANAGER MEGATRUST INVESTMENT (HK), HONG KONG:

“Chinese ADRs face increasing regulatory challenges from US and Chinese authorities. For most businesses, it will be like walking on eggshells trying to please both parties. De-listing will only make things easier. “

NAN LI, ASSOCIATE PROFESSOR, FINANCE AT THE UNIVERSITY OF SHANGHAI JIAOTONG, SHANGHAI:

“Well, again, that doesn’t surprise me. It’s the only way Didi can survive, and maybe that’s a good thing for investors in the US market. There are other issues. related to Didi in addition to data security. Didi also integrated financial services on their platform, they withhold payment to drivers, charge high fees to drivers, give loans with high interest rates, etc. And problems inherent in carpooling due to the lack of proper regulation of bad driver behavior.

“I don’t think Didi qualifies to be on the list before separating data platform services from financial services and putting in place effective protocols to manage and secure reader liability and benefits. “

JUSTIN TANG, ASIAN RESEARCH MANAGER AT UNITED FIRST PARTNERS, SINGAPORE:

“Didi’s listing was widely expected given the crackdown after its IPO. It will now set a precedent for other companies listed in the United States, especially those with data issues.

The crackdown began with Ant’s botched IPO. The Chinese government has already shown that it will go beyond what the market expects. It will be some time before feelings deteriorate in the market. with regard to Chinese names. “

KENNY NG, SECURITIES STRATEGIST, EVERBRIGHT SUN HUNG KAI, HONG KONG:

“Didi’s plan to go out of business in the United States and the listing of Hong Kong stocks, I think, will have a clear impact on decisions about where to locate future listings for big tech stocks. At the same time, this This event makes the market believe that the current oversight of the mainland tech stocks industry will continue, and the decline in Hong Kong-listed tech stock prices today also reflects this factor.

“On the other hand, Didi, the company itself, also has its own unique factors. Because Didi’s company has more data related to customer information, which leads regulators to it. pay special attention. “

MING LU, RESEARCH ANALYST AEQUITAS, SHANGHAI:

“I don’t think this change brings anything positive for Didi’s investors. The authorities have not announced a definitive sanction against Didi and the investigation is continuing after more than 100 days. So far, the risk for Didi and its shareholders is always unlimited. “

KYLE RODDA, IG ANALYST, MELBOURNE:

“In the short to medium term, this means volatility for pockets of the market that are really exposed to global trade and US-China geopolitics in particular, and you might start to see some pressure on Hong Kong stocks, which have tended to appear to raise capital in the United States but base themselves in China and derive most of their profits from the Chinese economy.

“In the longer term, it’s more important, because it’s going to be one of those frogs in a beaker scenario where very, very slowly there will be a decoupling between the United States and China in terms of economic relations. , as well as their entanglement with each other in the global financial system. “

TOM NUNLIST, SENIOR ANALYST AT CONSULTANCY TRIVIUM CHINA, BEIJING:

“My two main thoughts at this point are: if it is confirmed that the ACC is really the main player behind the thrust, then a big flex for the regulator. This would be a further indication of his growing power and influence.

“The apparent problem is data security, but we still don’t have a good idea of ​​what the specific concern is.

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Reporting by Kevin Buckland in Tokyo, Alun John and Scott Murdoch in Hong Kong, Anshuman Daga in Singapore, Josh Horwitz in Shanghai; edited by Richard Pullin

Our Standards: Thomson Reuters Trust Principles.


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