Didi lost one-fifth of its market value after Chinese regulators announced an investigation into the ride-hailing app that last week raised more than $4 billion in a New York IPO, reported the Financial Times.
China’s top government body, the State Council, said it would act to strengthen the protection of sensitive data related to overseas listings and “consolidate the information security responsibilities of overseas listed companies”.
“This is direction from the highest level,” said Bruce Pang, head of research at the investment bank China Renaissance. “The landscape of not only China’s market but also its regulatory framework could see dramatic changes.”
Pang added that the new rules may impose long waiting periods on any companies hoping to list abroad, which “will hit investor sentiment, depress valuations for IPOs in the US and make it more difficult to raise funds in New York”.