By
Tolu Ajiboye
March 22nd, 2024
Wealth management firm Lufax began trading on the NYSE with a 14% dip from its IPO price. Lufax CEO is not ruling out Asian market expansion in the long term.
The shares of Lufax Holding Ltd (NYSE: LU) are finally trading on the New York Stock Exchange (NYSE) but experienced what analysts have described as a ‘rocky start’ as the shares reportedly opened 14% lower than its Initial Public Offering (IPO) Price. According to MarketWatch, Lufax sell price on the floor of the NYSE plunged to about $11.60, a figure remarkably lower than its IPO price of $13.50 per share.
The Lufax IPO is arguably one of the biggest this year with about US$2.36 billion raised following the issuance of 175,000,000 million American Depositary Shares (ADS). As Coinspeaker reported on the IPO, the move by Lufax to get listed on NYSE is quite ambitious amidst the clampdown of Chinese firms forcing firms like Didi to back out the thoughts of a U.S. public listing.
Despite the rocky start of its journey, Lufax Chief Executive Officer Greg Gibb has expressed the firm’s short term goal to focus on Asian markets.
“The way we look at the international side, particularly South East Asia, is a great long-term opportunity. In many of the markets in Southeast Asia, you add it up, it’s still smaller than a province in China, so our immediate priority for the next three of four years in terms of growth is clearly the domestic market,” he told CNBC in an interview.
The potential of Chinese markets remains attractive to businesses particularly the likes of Lufax that have their origin from the region. A move out of the shores of Asia just as Lufax did has been seen as a strategy to seek more investors which has its own benefits in scaling up, but the potentials of Chinese and Southeast Asian markets cannot be undermined.
Lufax May Seek Expansion without NYSE Type Listing
The proposed expansion of Lufax to the Asian markets will not necessarily follow another public listing as that done with the NYSE as noted by Gibb. He said that the current economic changes happening around Hong Kong as well as the Greater Bay Area will make preparations for a 5-year takeover at this time a strategic one.
Gibb told CNBC that the outright transparency of the company is worth pushing it to compete on the international stage and that a secondary listing in Shanghai or Hong Kong is not a part of the company’s immediate plans but may consider it should there be a need and reiterates how straightforward it will be if the decision to list in these two markets are finally made.
As a Fintech company with products and offering now spanning into Wealth Management, Lufax hopes its listing will afford it the opportunity to partner with local players in churning out financial services and products that are backed by its own technology.