Wall Street banks have earned hundreds of millions in fees from Chinese groups selling shares in New York and Hong Kong in 2020, illustrating the fee pool that is at stake as Washington threatens to delist these companies from US markets, reported the Financial Times.
American bank fees from initial public offerings, follow-on share sales and convertible bonds issued by Chinese companies including the likes of retailer JD.com and tech group NetEase are up about 24% from a year ago at $414 million, according to data from Refinitiv. They accounted for 43% of the total fee pool of $958.9 million, just ahead of US banks’ market share a year ago.
Morgan Stanley and Goldman Sachs topped the list, bringing in $151 million and $74 million so far this year, respectively. The pair served as underwriters in July for the $1.5 billion Nasdaq IPO of Li Auto, a Chinese electric vehicle start-up. Both are also underwriting this week’s $1.9 billion flotation on the Nasdaq of Chinese housing platform KE Holdings. The two banks declined to comment.
“There’s been strong IPO activity both in the US and Hong Kong,” said Jason Elder, a partner at law firm Mayer Brown, who added that the growing fee pool was in line with China listings activity in 2020.