It’s time for IPOs | Calamatta Cuschieri

Markets update and IPO issues in Hong Kong & China 

While U.S. markets await the IPOs of Uber and Airbnb, three Chinese companies that rank among the world's 20 largest internet firms are expected to list this year in $5 billion-plus deals
While U.S. markets await the IPOs of Uber and Airbnb, three Chinese companies that rank among the world's 20 largest internet firms are expected to list this year in $5 billion-plus deals

U.S. stocks closed solidly lower on Thursday, with major indexes suffering one of their worst sessions of the month and the Dow Jones Industrial Average extending its losing streak to an eighth day as fears of a potential global trade war continued to weigh on investor sentiment.

Investors remain fixated on trade tensions between the U.S. and key trading partners such as China and the European Union.

The last time the Dow closed in positive territory was on June 11, when it eked out a gain of 0.02%. Since then, it has dropped 3.3%, a milder decline than the nine-day drop seen in 1978, a period over which it fell 4.3%.

Investors are worried the tensions and recent tariffs could develop into a headwind for the global economy. These concerns come as the U.S. economy, the world’s largest, is increasingly viewed as in the late stages of its expansion.

Hong Kong and China: ready to become the largest issuing market for IPOs

While U.S. markets await the IPOs of Uber and Airbnb, three Chinese companies that rank among the world's 20 largest internet firms are expected to list this year in $5 billion-plus deals in Hong Kong: Xiaomi, known as the Apple of China; Meituan-Dianping, operator of websites similar to Groupon and Yelp in China; and Didi Chuxing, which bought Uber's China business.

The Hong Kong Stock Exchange is attracting the initial public offerings of some of the largest companies in the world. Analysts consider Hong Kong in a good position in order to provide an access point to one of the fastest growing regions of the world.

Hong Kong's capital markets development also comes as Western institutional investors are increasingly interested in international opportunities, and Beijing looks to open up its financial markets to foreign investors.

In April, the Hong Kong Stock Exchange implemented new policies to allow biotech companies without revenue or profit to apply for public listings.

Beijing is also launching a “China Depositary Receipt” program that will allow China's tech giants, listed in Hong Kong or in the U.S., to have a dual share offering in the mainland.

The US dominance in global IPOs still remain. Ten of 80 U.S. public offerings this year were Chinese companies. But as analysts said, Hong Kong is shifting away from listings of state-owned enterprise to high-growth tech companies, and mainland China's markets are slowly maturing. Hong Kong and China together are likely to become in future the largest issuing market for IPOs.

I3 Verticals stock rose after IPO

I3 Verticals, which provides integrated payment processing and software for small- and medium-sized businesses, rose around 42% in Thursday trading, following the initial public offering.

I3 priced its IPO at $13 a share late Wednesday, and shares are now trading above $18.

The first trade was executed for $18 at 11:12 am ET.

The company priced 6.65 million shares, and its offering raised about $86 million. I3 Verticals is listed on the Nasdaq under the symbol IIIV.

Disclaimer: This article was issued by Linda De Luca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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