On the Swiss stock exchange SIX, the number of dual listings from China increased to nine companies. The Chinese deals lifted Zurich into the top group of European stock exchanges.
The SIX Swiss Exchange welcomes its ninth company from China, Jiangsu Eastern Shenghong, in listing its depositary receipts, or GDRs, which can be traded on the exchange's China-Switzerland Stock Connect trading segment, SIX said in a statement Wednesday.
The chemical company placed nearly 40 million GDRs at an offering price of $18.05 per GDR, representing ten A-shares of the company which are listed on the Shenzhen Stock Exchange. Jiangsu Eastern Shenghong grossed proceeds of $718.3 million from the offering.
Zurich Ahead in Europe
Because of equity issues from China, Zurich has risen to the top of the European IPO rankings this year, overtaking London and Amsterdam, according to data compiled by «Bloomberg.»
Zurich is particularly attractive to listed companies from China because Switzerland is considered politically neutral where companies can raise funds from foreign investors at a time when global stock issuances have evaporated.
Expanded Agreement
Listings have been sped up by this year's expansion of the Shanghai-London Stock Connect system, which facilitates cross-border deals for companies already trading in mainland China.
It not only connects the British capital with China's financial center but now includes Shenzhen, Switzerland, and Germany.
A Form of Arbitrage
So far, Chinese IPOs in Switzerland have not attracted European investors or even Western banks on a large scale, especially since most companies rely on advisors and shareholders from their home country. According to critics, Chinese banks are essentially pricing the listings as arbitrage opportunities, selling new listings in Zurich at a discount to shareholders in China.
