Goldman CEO Solomon says China’s tech crackdown will delay many U.S. listings

David Solomon, CEO of Goldman Sachs & Co., speaks during a Bloomberg Television interview at the Milken Institute Global Conference in Beverly Hills, California, the United States, on Monday, April 29, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Goldman Sachs CEO David Solomon said China’s recent moves to strengthen supervision of its technology industry had surprised him and will likely deter “a large number” of companies from listing stocks in the US

Last week, equestrian halling giant Didi Chuxing’s shares slumped after China declared that new users would not be able to download the app amid a cybersecurity review. Didi had been advised by Chinese regulators to postpone its US listing, but the tech company continued to do so last month, the Wall Street Journal reported.

“There is a significant backlog of Chinese companies using global capital to raise money to support their growth, and we have our own backlog, a large number of companies planning to enter the US market “Solomon said to Wilfred. interviewed by CNBC Frost Tuesday.

“Due to the actions taken by the Chinese government, I think some of these companies will not be able to enter the market at this time,” said Solomon, adding that it is too early to assess the long-term impact.

As the head of arguably the premier global Wall Street consultancy, Solomon faces increasingly strained relationships between China, its giant tech companies, and the rest of the world. Goldman, along with JPMorgan Chase and Morgan Stanley, were the leading underwriters on Didi’s US listing.

“I was surprised that this was how it worked at this point, but we are dealing with regulators around the world,” said Solomon. “I think it’s too early to see how exactly the shift will balance out over time, but there is no question that the Chinese want more control over the direction of some of these listing activities and so they are taking steps that give them more control. “

Early Tuesday, the New York-based bank released results that slightly exceeded expectations, aided by strong revenues from Wall Street advisory activities.

Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to get started Try it for free today.

Comments are closed.