What steps do Chinese companies need to follow to take advantage of the goldmine of investors and liquidity of the U.S. market?
pportunities abound for companies listing in the U.S. — the country ranks in the top echelon for doing business, with rigorous listing and disclosure standards. But getting a foot in the door simply isn’t enough to tap into the vast liquidity available while attracting and maintaining long-term shareholders. To thrive, companies must perform due diligence and be fully engaged in day-to-day activities.
The New York Stock Exchange (NYSE) has been encouraging Chinese companies to consider the U.S. as either their primary listing venue or as a complementary one in addition to their primary listing. Even with turbulent trade talks continuing between the U.S. and China, investors can expect to see new Chinese companies looking to enter the NYSE after a long period of uncertainty.
Choosing how to enter the U.S. public markets is a critical process. The investment community puts the onus of good, transparent business practices on listed companies — and there are no shortcuts to addressing investor concerns and expectations. Chinese companies that can develop a strong governance policy, effectively communicate with investors and bridge the cultural gap, have the brightest futures. By following expected policies and practices, they can potentially tap into a sophisticated investor base with additional visibility and a more stable valuation that hopefully compounds over time in tandem with their growing businesses.
While foreign companies have numerous international options for public listing, the U.S. capital market provides a multitude of benefits, including:
- A positive regulatory environment that supports the path to listing and being a public company
- The deepest pool of liquidity in the world
- Access to sophisticated and diversified investors
To more fully understand the process companies should follow to ensure a smooth entry into the U.S. markets, as well as the challenges and opportunities they will face, click here.