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First Chinese-listed company launches on London Stock Exchange

Edmund Heaphy
Finance and news reporter
Chancellor of the exchequer Philip Hammond launches the Shanghai-London Stock Connect project. Photo: Henry Nicholls/WPA Pool/Getty Images

Shares in Huatai Securities (HTSC.L), the first Chinese-listed company to sell shares on the London Stock Exchange, rose by as much as 7% on Monday in their first day of trading.

Initially priced at $20.50, the company’s global depository receipts traded as high as $21.96 in early trading, before falling back to $21.26 Monday afternoon. Global depository receipts are a type of certificate used as an alternative to actual company shares.

The listing marked the launch of the long-awaited Shanghai-London Stock Connect project, which essentially connects the London Stock Exchange with its Shanghai counterpart.

Speaking alongside Chinese vice-premier Hu Chunhua on Monday, chancellor of the exchequer Philip Hammond said the “ground-breaking” project will deepen the UK’s “global connectivity.”

“London is a global financial centre like no other, and today’s launch is a strong vote of confidence in the UK market,” Hammond said.

The Connect project was first mooted in 2015, but didn’t materialise until the end of 2018.

Before then, Chinese-listed companies were forbidden from listing their shares outside of China or Hong Kong.

The project also allows London-listed firms to launch offerings in China.

Huatai, one of China’s largest brokerages, put 75 million global depository receipts on the market, meaning the company raised at least $1.5bn (£1.2bn) on Monday.

Speaking last week, Huatai president Zhou Yi said the offering in London was the “next step in our creation of a truly global business, expanding our international presence, and providing new resources to support our growth strategy.”

The company previously said it would use the money raised from the listing for international expansion.

Huatai originally planned to list its shares in December, but abruptly cancelled it for unspecified reasons even after winning approval from China’s securities watchdog.

JPMorgan, Morgan Stanley, and Huatai itself underwrote and coordinated the deal.

The brokerage mainly engages in wealth and investment management for clients.

Before the launch of the Connect project, many Chinese companies opted to list on US stock exchanges instead of solely in China.