The new channel opportunity to list in Switzerland has given Credit Suisse and UBS great benefits. Issuers envisage to hire at least one bank with local expertise in every deal to make sure the transaction. Around six Shenzhen-listed companies have reported plans to offer GDR (Global Depository Receipts) on Zurich’s SIX Swiss Exchange. This opportunity occurs after China Securities Regulatory Commission allowed EU countries involved in the Shanghai-London Stock Connect trading link.
Therefore, the eligibility criteria also meets extensions, especially for some Shenzhen-listed companies. Banker in the deal argued that Chinese banks lack trading licenses or settlement capability on SIX Swiss Exchange. In this case, Chinese banks need a Swiss bank or international bank on the deal. Credit Suisse plans GDR offers of Lepu Medical Technology and Ningbo Shanshan.
The other bank lending the Lepu deal is CICC.
Morgan Stanley and Huatai International are also in the Shanshan offering. These deals hope to raise around $500m or 10% of shared capital. In the second quarter, UBS collaborated with Citic Security on Sany Heavy Industry’s GDR offer for as much as $1bn.
Other international banks and two Swiss banks also pitch roles on the GDR listing of Gotion High-Tech. It is the Shenzhen-listed company, with a market capitalization of around $6bn. They plan to sell at least 10% stake. Haitong International and CICC are leading the float. The two Chinese brokers also plan a Swiss listing for Keda Industrial Group. It is a Shanghai-listed building material machinery manufacturer.
In terms of other transactions, a Swiss bank joins a later stage. Fangda Carbon New Material also held discussion with Credit Suisse on SIX GDR listing. Bankers see this as a huge opportunity in a quiet market. However, there could be a challenge ahead. This is because the CSRC’s unwritten rigid pricing rule does not allow GDR issuers to sell shares higher than 10%.
