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Investors are shifting their shares in major Chinese e-commerce companies from the US market to the Hong Kong market as concerns about Chinese companies getting delisted from the US grow.
Chinese giants, including JD.com Inc (NYSE: JD) and Alibaba Group Holding Ltd (NYSE: BABA) have experienced high share transfer to the Hong Kong market.
About 77% of JD.com’s shares are circulating in Hong Kong’s market as of Tuesday, versus 44% at the beginning of this year, while Alibaba’s Hong Kong-listed share portion rose to 56% from 53% during the same period, according to a Bloomberg report.
This comes as Chinese companies trading in the US face the risk of getting delisted from the New York Stock Exchange and Nasdaq if they do not grant access to the US to audit work papers.
The US mandates all companies that trade publicly in the country to grant access to audit work papers. If the firms dodge this requirement for three straight years, they may face removal from the US market.
China had recently modified a decade-old rule after which US regulators will have full access to auditing reports of the Chinese companies listed in New York. About 200 Chinese firms are listed in the US.
Picture Credits: Bloomberg
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