China’s Mega Listings Intensify Rivalry Between Stock Exchanges

China’s Mega Listings Intensify Rivalry Between Stock Exchanges

Ant Group Co.’s highly-anticipated initial public offering in Shanghai is set to intensify rivalry between the bourse and its competitor Shenzhen, as both aim for the top spot in China’s $9.9 trillion equity market.

The megacities house two of the world’s largest 10 stock-exchange operators, and have for decades jostled to become the go-to destination for firms wanting to open their doors to retail and institutional investors alike. Together they make up the world’s second-most valuable national equity market globally after the U.S. A rally in mainland China has added $2.6 trillion to stock values this year alone thanks in part to Beijing’s policies to encourage trading.

While the Shanghai Stock Exchange has been the default bourse for large state-backed corporations, it’s fallen behind in stature in recent years as investors chase multibillion-dollar tech listings in Shenzhen. The southern city’s proximity to Hong Kong, coupled with its plentiful high-growth firms, has made it attractive to more risk-tolerant and international investors. Its ChiNext index has outperformed major global peers this year, leaping by nearly 50%. The Shanghai Composite is up nearly 6%.