First Chinese D-Shares List In Frankfurt
With today’s listing of Qingdao Haier the China Europe International Exchange (CEINEX) has started its new market for Chinese blue-chips in Frankfurt: the CEINEX D-Share Market. The newly issued shares of the internationally leading producer of consumer electronics and home appliances, headquartered in Qingdao in China’s Shandong province, are listed in the Prime Standard, which is part of the EU-regulated market of the Frankfurt Stock Exchange and were quoted at € 1.06 at the start of trading.
It is the first time so-called D-shares of a Chinese company are listed in the @CEINEX D-share market of the Frankfurt Stock Exchange. CEINEX is a joint venture established by Shanghai Stock Exchange, @DeutscheBoerse and China Financial Futures Exchange. https://t.co/sijH1zdNUd
— Eurex (@EurexGroup) October 24, 2018
By starting this market, CEINEX provides for a new bridge in connecting the Chinese and international markets for Chinese issuers and investors globally.While the D in D-Shares stands for “Deutschland” or “Déguó”, the name for Germany in Chinese, D-Shares are shares issued by companies incorporated in accordance with the Company Act of the People’s Republic of China and listed on the CEINEX D-Share Market through admission to trading on the EU-regulated market of the FSE.
Dr. Han Chen, Co-Chief Executive Officer of CEINEX, says, “Today we celebrate the opening of a new bridge between China’s and Europe’s financial markets. Haier, as the international leader in white goods, is a wonderful first D-Share company. CEINEX is looking forward to further establish its platform and grow the D-Share Market with more Chinese blue-chips in the future. The first D-Share IPO and listing by Haier marks the beginning of a new era for Chinese companies on European capital markets.”
Companies such as Qingdao Haier – that have a primary listing on the Shanghai Stock Exchange – filing for a listing on the CEINEX D-Share Market have to fulfill certain criteria to be accepted to the market. Under the initial strategy of the “A plus D-model” those corporations that have shares listed on a Chinese exchange (A-Shares) and are looking for a secondary listing (D-Shares) need to provide proof of no sanctions by the exchange regulator as well as the exchange over the past three years, show no alerts for a delisting and committed no severe violation of information disclosure over the last twelve months prior to the planned listing in Frankfurt. As soft factors, companies wanting to be listed on the CEINEX D-Shares market must, for example, have a clear international strategy, a good track-record, substantial business in Europe, and a reliable dividend payout policy.
The CEINEX D-Share Market facilitates the issuers to support their international strategy and promote their business expansion by raising capital as well as increasing credibility in Europe. For global investors it provides the opportunity to invest in Chinese companies directly in Europe to diversify their asset allocation during European and US trading hours and under European regulation and in Euro.
Deutsche Bank acted as global coordinator for the IPO, with J.P. Morgan, UBS and CICC as joint bookrunners. Deutsche Bank and Baader Bank are designated sponsors in Xetra trading, Baader Bank is also the specialist on Börse Frankfurt.
The bank can act as a lead underwriter on renminbi-denominated bonds from foreign corporates.
The Swiss bank was the first to apply to raise its shareholding after a change in the law.
Haier will float on Ceinex’s D-Shares Market, part of the Frankfurt Stock Exchange.
China will also be added to a watch list for possible inclusion in FTSE’s global bond indexes.
Enhancements to the scheme are expected to include hedging solutions.