Chinese Shares Surge as Country Weighs Giving US Access to Audits By Investing.com

By Dhirendra Tripathi

Investing.com – Shares and ADRs of Chinese companies were up across the board in premarket trading Friday after reports that the country may grant U.S. regulators full access to audit reports of its firms listed on American exchanges.

Chinese authorities had so far been reluctant to allow the access. Had that stand continued, many of those companies risked getting delisted from American exchanges.

The root of the case is in a 2020 U.S. law that mandates public companies to grant American authorities access to audit work papers. Firms face delisting in case of non-compliance for three straight years.

According to reports, Securities and Exchange Commission had prepared a list of companies that were refusing to provide access. This included Baidu (NASDAQ:) and its video arm iQIYI (NASDAQ:) (up 9% and 13%, respectively, in premarket), Yum China Holdings (NYSE:) (5%), BeiGene (NASDAQ:) (6%), Zai Lab (NASDAQ:) (7%), ACM Research (NASDAQ:) (5%) and Futu Holdings (NASDAQ:) (12%).

The news had a positive impact on shares of other Chinese firms also, given the fears of their peers being delisted had weighed on them as well.

ADRs of Alibaba (NYSE:) and JD.com (NASDAQ:) were both up 6%. Pinduoduo (NASDAQ:) and Didi (NYSE:) also surged, rising 13% and 15%, respectively.