American traders do not appear to give a hoot about their politicians' posturing at Beijing. Shares of Chinese companies in New York have rallied even as legislators try to delist themand initial public offerings are still popping. Which could be partly investment banker greed, and perhaps traders' short attention spans. But it's also an implicit bet that President Donald Trump, along with his team of China hawks, are still bluffing.
Firms from the People's Republic raised $5.6 billion from the United States so far this season, over double the amount they had increased via this period in 2020. That includes chandelier-smashing pops like KE Holdings BEKE.N, which opened 75% over its IPO price a week, and you will find more in the queue. Secondary market performance has been decent too; businesses from the People's Republic recovered an average increase of 7% in the Big Apple last quarter, or 15 percent when measured by market capitalisation, according to a Breakingviews analysis.
That's been a bonanza for investment monies. And with traders flush with liquidity out of pandemic bailouts, they've plunged into all sorts of quick China transactions, which rewards trading desks.
There's a problem, however: mainland China companies' auditors can refuse review by U.S. accounting labs. Since their executives and assets are out U.S. jurisdiction, American investors have little legal recourse against fraud, or government abuse that occurs with depressing regularity given U.S. tolerance for weighted voting rights. Nasdaq-listed Luckin Coffee, for instance, after worth $12 billion, also confessed to fraud in April and has been delisted.
Long-term share performance isn't impressive either. Of the 180 or so Chinese firms trading on main markets in New York, two-thirds are below their initial public offering prices, Refinitiv data show. From this comes the push by Republican Senator Marco Rubio and his allies at the White House, to induce them to comply with U.S. regulations, or leave the marketplace.
If coverage becomes law, some $2 trillion of market capitalisation could evaporate from the planks. But Wall Street is not sweating Pennsylvania Avenue, possibly because it is betting against President Donald Trump too. Data from the middle for Responsive Politics indicate the securities and investment businesses are giving far more cash to Joe Biden than the present president. What resembles bullishness on China might also be bearishness on Trump.
Firms from the People's Republic raised $5.6 billion from the United States so far this season, over double the amount they had increased via this period in 2020. That includes chandelier-smashing pops like KE Holdings BEKE.N, which opened 75% over its IPO price a week, and you will find more in the queue. Secondary market performance has been decent too; businesses from the People's Republic recovered an average increase of 7% in the Big Apple last quarter, or 15 percent when measured by market capitalisation, according to a Breakingviews analysis.
That's been a bonanza for investment monies. And with traders flush with liquidity out of pandemic bailouts, they've plunged into all sorts of quick China transactions, which rewards trading desks.
There's a problem, however: mainland China companies' auditors can refuse review by U.S. accounting labs. Since their executives and assets are out U.S. jurisdiction, American investors have little legal recourse against fraud, or government abuse that occurs with depressing regularity given U.S. tolerance for weighted voting rights. Nasdaq-listed Luckin Coffee, for instance, after worth $12 billion, also confessed to fraud in April and has been delisted.
Long-term share performance isn't impressive either. Of the 180 or so Chinese firms trading on main markets in New York, two-thirds are below their initial public offering prices, Refinitiv data show. From this comes the push by Republican Senator Marco Rubio and his allies at the White House, to induce them to comply with U.S. regulations, or leave the marketplace.
If coverage becomes law, some $2 trillion of market capitalisation could evaporate from the planks. But Wall Street is not sweating Pennsylvania Avenue, possibly because it is betting against President Donald Trump too. Data from the middle for Responsive Politics indicate the securities and investment businesses are giving far more cash to Joe Biden than the present president. What resembles bullishness on China might also be bearishness on Trump.