US step to delist Chinese ADRs worsens investment, listing outlook

HONG KONG : The U.S. securities regulator's move to identify Chinese firms likely to be delisted from New York for not meeting auditing requirements is pushing more fund managers to exit their holdings and dimming the prospect for new listings in the near term.

Goldman Sachs estimates that U.S. institutional investors currently hold around $200 billion of exposure to Chinese ADRs. The fund started offloading Chinese ADRs since late 2019, and plans to sell off any remaining holdings in the coming weeks, said the portfolio manager, who declined to be identified as he is not authorised to speak to the media.

"We have minimal long exposure to ADRs and have been net short ADRs," said Ken Xu, chief investment officer of Strategic Vision Investment, a Hong Kong-based hedge fund with more than $1 billion in assets under management. China-focused asset manager Krane Funds Advisors said its $4.9 billion KraneShare CSI China Internet ETF aims to convert all Chinese ADRs in its portfolio into their Hong Kong shares in the coming months.

Source: News Formal (newsformal.com)

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