China-UK capital markets to see significant cooperation opportunities amid COVID-19 recovery: London Stock Exchange

Tom Attenborough, Head of International Business Development within Primary Markets at London Stock Exchange

The China-UK relationship in capital markets will contribute to an exciting and dynamic landscape, with “partnership” as a key concept, said Tom Attenborough, Head of International Business Development within Primary Markets at the London Stock Exchange.

“At the London Stock Exchange, we see a huge opportunity to help Chinese issuers raise capital and build an international investor base, as well as connect Chinese investors with issuers listed on the London market,” he said.

His remarks were made following the recent LSEG Beijing Seminar, an effort taken by UK’s Department for International Trade and The British House, focusing on the London and Chinese capital markets and opportunities for Chinese issuers internationally.

London has the most international issuer base of any major global exchange, along with having a significant international investor base that owns London listed stocks, Attenborough said, noting that there are already a number of initiatives in place between China and the UK, with the launch of the Shanghai-London Stock Connect as a high profile example.

On Oct. 22, SDIC Power Holdings, a leading power generation company in China, listed on the London Stock Exchange, became the fourth Chinese company to list in London via the Shanghai-London Stock Connect following its launch in June last year. SDIC joins Huatai Securities, China Pacific Insurance and China Yangtze Power Corporation by listing GDRs on London Stock Exchange’s Shanghai segment.

It is a great opportunity for listed companies in Shanghai who are looking at international expansion and for those looking at building their profile and investor base outside of China, Attenborough shared, adding that the four companies have collectively raised around 6 billion dollars through the international market. The London Stock Exchange expects the Shanghai-London Stock Connect programme to continue to build over time.

The London Stock Exchange hosts a number of capital market events and webinars in China to promote the strengths of London’s markets, working together with the advisory community, with support from its website and platforms such as Issuer services’ Spark. Through these platforms, potential issuers can find a wealth of information in English and Chinese to help them better understand how London’s capital markets can support their business, Attenborough added.

Noting that FinTech is another area which has great potential for UK-China cooperation, he explained that as the UK is home to a vibrant FinTech community: “there is great benefit to be gained from partnerships to strengthen the global reach of FinTech companies, and our countries’ stock exchanges can play a pivotal role in facilitating these connections and access to capital.”

The broader technology sector is seeing strong activity in London, said Attenborough, which presents another opportunity for Chinese companies. “In addition to providing a more supportive regulatory framework and competitive listing costs, London also provides high growth companies the opportunity to raise capital in line with global peers.”

With regard to the global COVID-19 pandemic, Attenborough pointed out that London’s equity market has continued to support businesses in capital raising despite challenges that the pandemic has created for the real economy. Year-on-year, 2020 has seen approximately 25% more equity issuance than in 2019, predominantly driven by existing issuers raising further capital to restore balance sheets and replenish liquidity.

Amid market conditions such as these, the value of having access to investors’ capital from all around the world becomes even more important, he noted.

“The London Stock Exchange will continue to work with the Shanghai Stock Exchange to broaden and deepen our existing Shanghai-London Stock Connect programme, to make sure that this can be part of the continued recovery and growth in both markets,” Attenborough stressed.

“UK investors are aware of the strength of China’s recovery so far, so I think they will look positively at Chinese companies who take the decision to raise capital through London,” he said, expressing his belief that the Shanghai-London Stock Connect programme will continue to go from strength to strength.