Skip to main content

The 'gold standard' US market needs to maintain rule of law even if that means major Chinese firms delist, former NYSE president says

An unsettled dispute between the US and China over corporate auditing may lead to delistings by Alibaba and other Chinese companies, but maintaining market protections for investors is more essential to the US stock market, former president of the New York Stock Exchange Tom Farley told CNBC on Friday. 

China state-run energy companies PetroChina and Sinopec and three other Chinese companies on Friday each said they plan to delist their shares from the New York Stock Exchange. The moves come as US and Chinese officials were deadlocked in negotiations in a long-running disagreement over auditing regulations. The five companies will submit delisting paperwork later this month. 

In terms of those five companies, "economically, it's a non-event, no big deal," said Farley, who served as NYSE president from 2014 to 2018. "These shares trade very little here in the US, the institutional ownership is very little here in the US, they trade much more in their H-shares, their Hong Kong-listed shares." 

However, "symbolically it's very important because this is China saying, 'Hey, these are gone and the next batch to go are the Alibabas, the JDS.' That would be a big deal both economically and symbolically," he said, referring to Chinese online retail heavyweights Alibaba and JD.com.  
               Alibaba founder Jack Ma 

The New York Stock Exchange will "lose quite a bit of volume" if Alibaba were to delist and the same goes for Nasdaq if JD.com were to exit, said Farley. 

"All that said, the reason why people want to list on the New York Stock Exchange is because of the rule of law, because these companies can be inspected," he said. "So over the long term to maintain that gold standard, you need to have very high standards. And that's what this is. It's a balance between investor access and the market protections required to run a credible market."

Chinese officials have been reluctant to allow inspections by overseas regulators of local accounting firms because of national security concerns. US lawmakers have set a 2024 deadline for Chinese companies to comply with US auditing rules or face delisting.... 

Comments

Post a Comment

Popular posts from this blog

AUPCTRE to Buhari: Save NDDC from destruction, inaugurate board

The groundswell of agitation for the inauguration of the substantive board of NDDC in compliance with the law, has continued to rise with the demand from a Labour group, the Amalgamated Union of Public Corporations, Civil Service Technical and Recreational Services Employees (AUPCTRE) to President Muhammadu Buhari to inaugurate the board of the Niger Delta Development Commission (NDDC) The appeal was contained in a statement issued by the General Secretary of AUPCTRE, Comrade Sikiru Wahid, on Sunday, August 14, 2022. The labour union said the call has become imperative to save the commission from destruction. There has been unending calls by authentic stakeholders who have consistently demanded that the NDDC Act should be complied with in the governance of the Commission noting that it is illegal to have contraptions of interim management committees / sole administrator to administer the NDDC and arbitrarily utilise the monthly sums due to the Commission.  AUPCTRE in th...
Post a Comment
Read more

This Nigerian is creating software to help the world understand babies’ cries

                              Charles Onu Source: TechCabal When life gives you lemons, you can do whatever you want with them. Problems, on the other hand, require solutions that come from deep thinking and, sometimes, experience. For Canada-based Charles Onu, the problems he experienced in Nigeria formed the womb that would later produce Ubenwa, his innovative healthtech startup that leverages advanced technology to preserve the lives of newborns. In most parts of the world, immediately after a child is born, it undergoes a test called APGAR scoring. This test is a non-invasive examination of the baby that helps to identify whether the child has a medical condition to be treated. At that stage of the baby’s life, though, almost every illness can fall under the life-threatening category, which is why early diagnoses are imperative.  Regrettably, APGAR scoring is a lagging indicator ( a method th...
Post a Comment
Read more

Ghanaian Float acquires Nigerian Accounteer to provide accounting services to small businesses

Float co-founders, Jesse Ghansah (CEO) and Barima Effah Adjei (CPO). Image source: Float Float, a Ghanaian cash flow and spend management platform, has completed a full acquisition of Accounteer, a Nigerian subscription-based cloud-based accounting service that combines bookkeeping, tax prep, and financial advisory services all in one platform for African businesses, for an undisclosed amount.    This deal is coming 8 months after Float closed its $17 million equity and debt seed funding, one of Africa’s biggest seed rounds. According to Jesse Ghansah, who co-founded Float with Barima Effah Adjei in 2021, the conversation that led to the acquisition started in 2021, and it took close to 10 months before the deal was finally closed.  Ghansah and Adjei founded Swipe in 2020 to provide invoicing services to businesses. But in June 2021, the company rebranded to Float to extend credit to businesses against their receivables. That is, it gives loans to companies t...
Post a Comment
Read more