Ride hailer Didi’s price plunge, just days after listing, due to an investigation by Chinese regulators over data sharing practises has led a rout in local tech stocks. Despite concerns over the Hong Kong government’s latest legislative amendments aiming to curb doxing acts, rumours of tech firms pulling out of the city have been dismissed by the Asia Internet Coalition. The Hong Kong stock exchange is set to shorten the time for an initial public offering from pricing to listing, while China tightens rules for the nation’s companies’ global stock offerings.
MAJOR HEADLINES IN ASIA
This section tracks major political, economic and business news from the key economies in Asia.
The Asia Internet Coalition, which counts global tech firms including Facebook, Twitter and Google among its members, sent a letter to the Hong Kong government expressing concerns over a new anti-doxing law. Proposed to curb privacy violation and internet bullying, the ambiguity of the law would put tech firms at risk of criminal investigations or prosecutions for their users’ posts. While it was reported that some tech firms threatened to pull out of Hong Kong over fears of the law, AIC clarified that none of its members are planning to leave. – The Wall Street Journal, Hong Kong Free Press
Didi’s share price plunged 20 per cent on Tuesday after Chinese authorities prevented new users from signing up to its app just days after it raised more than $4bn in an initial public offering in New York. Regulators cited data security concerns for the move. The drop has led to a temporary pause in the slew of Chinese companies listing ADRs in New York, and dragged Hong Kong’s index down with it over concerns about how it may impact other tech stocks. – Financial Times
Norwegian telecoms firm Telenor has sold its Myanmar business, blaming the difficulties of operating under the military junta and dealing a blow to activists who say they relied on the only Western operator for communications. - Reuters
Mainland China, Hong Kong and Macau are among the 130 economies that have signed on to the “Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy”, which proposes a 15% tax floor and a revenue threshold US$891 million for multinational companies, with only the shipping industry exempted. – South China Morning Post
EQUITY AND DEBT CAPITAL MARKETS
This section highlights the biggest ECM and DCM developments in China and Hong Kong which are moving markets and grabbing headlines.
China’s move to rein in two of the most powerful corporate trends of the past decade -- the rise of data-hungry tech titans and the flood of Chinese listings in the U.S. -- is rippling through markets as investors brace for a new era of tighter oversight from Beijing. - Bloomberg
China’s government has tightened the rules (link in Chinese) for initial public offerings, introducing a sweeping overhaul to how the nation’s companies can raise capital onshore and overseas, in a move that may stymie some of the biggest deals in the world’s financial markets. – South China Morning Post
Chinese smart electric vehicle maker Xpeng Inc said it would raise $1.8 billion in a Hong Kong dual primary listing to expand its product line-up and develop its technology. - Reuters
Hong Kong stock exchange is set to shorten the time for an initial public offering from pricing to listing to two days from the current five by the fourth quarter next year at the earliest, aligning its market more with other financial hubs. – Bloomberg
Indonesia's Bukalapak launched an up to $1.13 billion IPO ahead of next month's listing, marking the country's biggest issue in over a decade amid rising investor appetite for tech stocks in a region boasting a growing consumer class
PE/VC DEAL ACTIVITY
This section tracks the fundraising, deals and other activities conducted by the PE/VC funds in Asia.
CHINA AND HONG KONG
Warburg Pincus is entering the distressed real estate space in China through a US$600 million partnership with Wensheng, a local special situations manager. – AVCJ
Hong Kong’s Animoca Brands, a gaming company focused on blockchain-based NFTs, has raised US$50 million from a group including Gobi Partners and a VC unit of Samsung. – AVCJ
Shenzhen Jijia Cross-border Network Technology, a SaaS specialist focused on cross-border e-commerce, has garnered US$28 million in a Series A round led by Seas Capital. – DealStreetAsia
Partners Group has acquired a 24.9% stake in China’s Apex Logistics from its majority owner Kuehne+Nagel for an undisclosed sum as part of an expansion plan. – AVCJ
InvestHK has opened a separate office on June 29 to help family offices set up business in Hong Kong, with a full team based in the city as well as dedicated staff in Guangzhou, Beijing and Brussels to attract foreign direct investment. – The Standard
Japanese financial group SBI Holdings has taken a stake in Singapore-based fintech startup AND Global, which provides microloans in Mongolia via its smartphone app. – Nikkei Asia
Logistics provider and investment manager GLP’s Japan Income Fund has raised a further ¥2.2bn in its latest capital raise, bringing the total to ¥300bn in less than a year. – IPE Real Assets
Singapore’s prominent real estate fund manager CapitaLand has launched its second logistics private fund of ₹2,250 crore to expand in India’s logistics sector. – DealStreetAsia
Singapore-based venture capital firm Insignia Ventures Partners is in the market to raise its third fund targeting around US$250 million. – DealStreetAsia
Ikhlas Capital is investing US$40 million in Silverlake Group, the holding company of SGX-listed Silverlake Axis Ltd, marking the entry of the first institutional partner for the latter. – The Edge
This section highlights the major regulations, policy changes and political developments in China and Hong Kong that have implications for the business environment.
Beijing's financial regulator forced software developer Qudao Culture Development to deregister, tightened its crackdown on digital currencies in the country. Prohibited services include offering business premises, commercial display, marketing, and paid visitor traffic guidance to cryptocurrency companies. – Yicai Global
Senior Chinese officials, including deputy head of the Legislative Affairs Commission of the National People’s Congress Zhang Yong, signalled further efforts to expand Hong Kong’s security powers, despite international criticism of the reach of measures already taken to curb dissent in the Asian financial centre. – Bloomberg
ONE FOR THE WEEKEND
Each week we will select one or two articles which have caught our attention – long reads, institutional outlooks, analysis or interesting viewpoints
Singapore is seeing a gathering tide of expats leaving, as resentment over jabs, jobs and travel restrictions weigh down city-state’s foreign professionals in what is a growing issue in expat hubs around Asia as countries in the region maintain rigorous travel while countries in the west continue to relax Covid restrictions.
THE WEEK AHEAD
Singapore is to relax some social distancing measures as the Hong Kong government weighs reopening travel bubble talks. The United Nations ESCAP is to host its Global Launch for the UN Global Survey on Digital and Sustainable Trade Facilitation 2021.
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