Quirky IPO Rule Means Wall Street Won’t Lead Ant Group’s Shanghai Sale
- Banks have to invest in deals they lead on new tech bourse
- JPMorgan, Goldman Sachs, UBS plan to pass on China IPO lead
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Most Wall Street firms are going to miss out on a chance to lead what could be China’s biggest stock deal when Ant Group goes public in Shanghai.
Under a quirky rule for initial public offerings on China’s technology exchange, lead banks must buy at least 2% of the shares issued, up to a cap of 1 billion yuan ($143 million). Global firms such as Morgan Stanley and UBS Group AG, with limited capital on China’s mainland, are reluctant to commit that much money to one deal.