Post-pandemic investing trends in Europe

Digital panel discussion with Jeffrey Wang, Head, BDA Shanghai; Tom Attenborough, Head, International Development, Primary Markets London Stock Exchange Group; John St. John, Chairman and CEO, STJ Advisors; Rebecca Park, Senior Practice Lead, Financial Services, Global Counsel; and Peter Mandelson, Chairman, Global Counsel.

Highlights from the discussion:

• The environment in China for private companies and foreign investors: Jeffery Wang noted that China has liberalised its Negative List in the last five years to allow greater foreign investment in sectors that were previously restricted or prohibited. The Chinese market remains extremely competitive, and investors need to be selective about the industry they choose to enter. With the ongoing regulatory cycle in China, investors also need to be mindful of the changing government policies, such as the recent Data Security Law. Looking ahead, the healthcare industry may be a sector subject to government scrutiny due to rising healthcare costs in recent years.

• London as an alternative to New York as a global listing hub: Tom Attenborough explained that London presents itself as a compelling alternative, with it being the most international exchange in the world and having low litigation risk compared to US exchanges. Recent changes in special purpose acquisition companies (SPACs) rules have created a more level playing field for Chinese companies choosing to list in London.

• Understanding the European capital raising environment: John St. John pointed out that in a post-Trump political environment, Chinese companies now have bigger opportunities in Europe due to the China-US tensions. However, Chinese investors that are looking to enter Europe should note the characteristics and nuances of the different European capital markets. Looking at the political drivers across Europe, Rebecca Park highlighted the importance of understanding key concerns such as labour rights and their impact on European member-state politics. That being said, Brussels and post-Brexit UK have been moving towards increased collaboration and more market access for Chinese companies.

• Tackling Chinese investor misconceptions of European capital markets: As European equity offerings differ from the Chinese markets, John St. John emphasised that Chinese companies should invest more time in the education phase of IPOs in Europe to attract committed investors. In addition, Rebecca Park underlined the importance of identifying risks, and building programmes of engagement to manage those risks to decrease scrutiny by the authorities.