Geopolitical concerns add to woes for pre-IPO activity, M&As for Chinese companies

GROWING geopolitical concerns from the trade tensions between the US and China are compounding an already-cautious outlook among investors on pre-listing activities and mergers and acquisitions (M&A) involving Chinese firms.

Pictet Asset Management, for one, in November projected a renaissance in the number of initial public offerings (IPOs) from Asia this year, spurred mainly by China. But the tit-for-tat trade war between the world’s two largest economies has doused that optimism somewhat.

Referring to the IPOs that could have come from the 167 Chinese unicorns, Jon Withaar, who manages around US$1 billion as head of Asian special situations at Pictet, said that number is likely to be significantly lower.