China’s Didi data displeasure | Financial Times

Shares in Didi are down more than 20 per cent in New York today, after a Chinese regulatory crackdown over the weekend spooked investors in the ride-hailing app that only listed in the US last week.

Beijing’s displeasure with Chinese companies listing in New York has become ever more apparent over the past few days. It began on Friday with the Cyberspace Administration of China (CAC) announcing an investigation on data security and ordering Didi to stop registering new users. This came two days after Didi completed a $4.4bn IPO, the biggest since Alibaba, with a capitalisation of $80bn. It priced at $14 a share, began trading at $16.65 and is currently priced at $12.30.

Then on Sunday, the CAC ordered Didi’s app to be taken off domestic app stores as it had “problems of seriously violating laws on collecting and using personal information”.

Today, the Chinese government came out into the open in showing its annoyance over US launches, announcing it would tighten restrictions on overseas listings. 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”.

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Beijing appears to be mirroring US concerns about national and data security and this tit-for-tat has investors running scared. Bruce Pang, head of research at the investment bank China Renaissance, said the new rules may impose long waiting periods on any companies looking 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”.

Thirty-four Chinese companies raised a record $12.4bn in New York during the first half of 2021, according to data from Dealogic. However, more than two-thirds have sunk below their initial public offering price, as growing regulatory scrutiny hit investor sentiment.

Lex points out regulators are also investigating Full Truck Alliance and Kanzhun after the road freight app and online recruitment group both listed in New York last month. Like Didi, they rely heavily on China for sales and a ban on signing up new users will damage their businesses.

Beijing has been riled by US legislation that forces Chinese companies to give access to their audit files to regulators or face being delisted. On Tuesday, the State Council called for establishing “a system for extraterritorial application of [China’s] capital market laws”.

The moves do seem likely to jeopardise future New York listings. “This is now a risk factor that is unmeasurable, unpredictable and impossible to navigate,” said an executive at one Wall Street bank.

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Tech tools — Sony’s neckband speaker

If you want an alternative to putting devices in or over your ears to hear video calls or listen to music, this non-bud may be for you. Sony announced today its SRS-NB10 wireless neckband speaker that is designed to rest on your shoulders. It features a full-range speaker unit angled upwards so as not to disturb those around you and a passive radiator to boost the bass. There are two microphones so you can be heard clearly at the other end and battery life is put at 20 hours. The neckband should be available in September for around $150 (€150).