This is an audio transcript of the FT News Briefing podcast episode: ‘CATL’s IPO pops in Hong Kong’
Sonja Hutson
Good morning from the Financial Times. Today is Wednesday, May 21st, and this is your FT News Briefing.
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Investors are shunning US equities, and Hong Kong Stock Exchange can now claim the biggest IPO of the year. Plus, some western countries are pressuring Israel to end its new Gaza offensive, but . . .
Neri Zilber
Only one foreign power matters, and that’s the United States, especially under this current US president.
Sonja Hutson
I’m Sonja Hutson, and here’s the news you need to start your day.
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More European and Asian investors are saying bye-bye to the US. They’ve pumped record amounts of money into global equity funds that exclude the US market. This uptick happened after US President Donald Trump returned to the White House. And most of the inflows came in the past three months. This is a big reversal for these types of funds. They’ve been unpopular for years, because Wall Street has experienced a huge rally for most of the past decade. But now, investors are worried that Trump’s tariffs could cause more harm to the US itself than to other major markets.
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The most hotly anticipated IPO of the year lived up to its hype. CATL, the Chinese battery maker, had an absolute banger of a first day on the market. It surged 16 per cent in its Hong Kong debut. Arjun Neil Alim is our Asia financial correspondent and has been following CATL’s listing. Hi, Arjun. Hi there. So tell me about CATL and all the anticipation in the run-up to the listing.
Arjun Neil Alim
So, CATL is the world’s largest electric vehicle battery manufacturer. If you drive a Tesla, an electric BMW, Ford, Mercedes, there’s a good chance the battery inside is made by CATL. They also make energy storage batteries. It’s a Chinese company. It’s listed in Shenzhen already, but the CATL listing has been long-awaited here in Hong Kong. The market has been kind of rocky for the last three years, but has recently come alive again due to Chinese companies like CATL, launching secondary listings here in Hong Kong.
Sonja Hutson
And who were some of the investors that were interested in CATL?
Arjun Neil Alim
So, a cornerstone investor, which is an investor that takes a share in the IPO before it goes public and agrees to hold it for a certain amount of time. These were a varied bunch. They included an investment unit that’s backed by the billionaire Agnelli family, who you might know from Ferrari. You had one US asset manager, Oaktree, Sinopec, and Kuwait’s sovereign wealth fund. So it was a mixture of strategic and financial investors.
Sonja Hutson
And obviously, this was CATL’s debut in Hong Kong. What’s the significance of choosing that market over, say, the US?
Arjun Neil Alim
You know, there was a lot of politics swirling around the CATL listing. There’s been increased scrutiny over Chinese companies that are listed in the US, you know, over national security. So you had Republican lawmakers calling for American banks like JPMorgan and Bank of America to step off their work on this listing. They obviously didn’t do that, but it just goes to show that even a capital market activity like this has become politicised in this era of US-China tensions. I think CATL choosing to do a listing in Hong Kong is really proof that Hong Kong has become the offshore hub for Chinese capital and a place where Chinese companies that want to expand internationally like CATL really have to use as a base.
Sonja Hutson
OK, so Chinese companies are trying to play it safe by sticking closer to home in a pretty tense geopolitical climate. But Arjun, what does CATL’s launch say about just listing it all right now?
Arjun Neil Alim
Well, that’s a good question. I think there are two reasons why this has been such a splendid day for CATL. Firstly, this is coming right after you had a US-China détente on the trade war that was sparked on April 2nd. The idea that Beijing and Washington aren’t going to drag the global economy down. And secondly, we are having a moment where global investors are reconsidering their overweights to the US. And the ability to buy a globally facing Chinese company that is at the forefront of a rapidly growing segment of technology, both EVs and energy storage, is probably pretty tempting for a lot of these investors.
Sonja Hutson
That’s the FT’s Arjun Neil Alim. Thanks, Arjun.
Arjun Neil Alim
Thanks very much.
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Sonja Hutson
The European Union plans to charge a flat €2 fee on billions of small packages entering the bloc. More than 4bn arrived in the EU last year, the vast majority of them from China. The fees are another blow for online retail giants Shein and Temu. They’re still dealing with a similar move from the US. The EU says it plans to use some of the money from the tax to offset the cost of extra customs checks needed to fulfil the new rules. The rest will go directly into the bloc’s budget.
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Israel is facing pressure from other countries to allow more aid into Gaza and stop its military expansion. On Monday, the UK, Canada, and France warned they would take action against Israel if it didn’t change course. The UK subsequently stalled trade negotiations with Israel. It comes as Prime Minister Benjamin Netanyahu launched a new offensive in Gaza. The FT’s Neri Zilber has been reporting on this, and he joins me now from Tel Aviv.
Neri Zilber
Hi, good to be back with you.
Sonja Hutson
Good to have you. So to start off, Neri, tell me what Netanyahu has said in the last few days. What sort of position is he in?
Neri Zilber
So, Netanyahu, early this week, laid out three interrelated but distinct positions. Number one, he’s continuing and even expanding the military offensive in Gaza against Hamas. And we see it on the ground, five divisions of Israeli infantry and armour moving ever deeper into the Gaza Strip. He wants to continue with the military offensive until total victory, including reoccupying the entirety of the Gaza Strip. Number two, he actually relented and allowed some humanitarian aid into Gaza earlier this week. That was even, according to him, due to international pressure. So Israel has allowed some aid into Gaza after nearly two months of blockade and siege. And then number three, almost a contradiction, but it is happening, there are still negotiations ongoing in Qatar for some kind of ceasefire for a hostage deal, albeit Netanyahu has very clearly stated this will only be a temporary pause and a temporary truce, but not end the war completely.
Sonja Hutson
Now, I mentioned earlier that some western countries have threatened to take action if Israel kept going with this offensive and didn’t let aid in. What exactly are they threatening?
Neri Zilber
We’ve already seen it on Tuesday. The UK has imposed sanctions on around seven West Bank settlers and individuals and as well as entities, asset freezes and travel bans and the like. The UK also took the rather dramatic step, which is definitely making headlines here in Israel, a freeze on renegotiating the free trade agreement between the UK and Israel. We also believe that the French government is now reassessing or at least threatening to reassess the association agreement that Israel has with the entire European Union. And so those countries at least are now making good on those threats.
Sonja Hutson
What about the US? What sort of pressure is it putting on Israel to end the war?
Neri Zilber
So that’s a very interesting question. So far, for all outward appearances, it seems that Israel still has the support, at least tacitly, of the Trump administration for its military offensive, despite the fact that even Netanyahu acknowledged that the Trump administration and other senior officials in Washington had pressured him to allow aid back into Gaza. And so on the humanitarian aid issue, you have seen movement and you have some pressure by the Trump administration. But it’s not clear to me whether Trump will actually stop or force Israel to halt its military offensive. For Israel, only one foreign power matters, and that’s the United States, especially under this current US president. If he turns on Israel, that could be decisive. But barring that, I don’t believe Netanyahu will cow or acquiesce to even European pressure.
Sonja Hutson
Neri Zilber writes about the Israel-Hamas war for the FT. Thanks, Neri.
Neri Zilber
My pleasure.
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Sonja Hutson
You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.
