A delay in Tencent Music Entertainment's New York initial public offering could signal a pause in Chinese companies' rush for U.S. listings.
Twenty-three such firms went public in the U.S. during the first three quarters of this year, on pace for the busiest year since 2010, according to Connecticut-based IPO advisor Renaissance Capital.
Tencent Music, the music streaming arm of Chinese technology conglomerate Tencent, plans to raise $1 billion, according to an Oct. 2 filing. But amid a sharp decline in U.S. stocks, led a global market sell-off in the last two weeks, the company decided to postpone its listing to November, according to The Wall Street Journal which cited sources. A representative for Tencent Music declined to comment to CNBC.
The pace of Chinese listings in the U.S. picked up as the second half of the year approached. Ten of the IPOs took place in the third quarter alone, with companies pushing to complete public offerings despite increased trade tensions between the U.S. and China, according to Renaissance.
While Beijing has tried to encourage domestic companies to list at home, the number of overseas IPOs indicate there is a desire to build capital outside China. The U.S. stock market has hit all-time highs in the last few months, while mainland Chinese stocks are in a bear market, or more than 20 percent below their recent high.
"If you're growing up in an environment where there's some volatility, then you're probably going to get more liquidity, exit while you can," said Jim Fields, co-founder of Relay, a Shenzhen-based company that has made informational videos for several Chinese companies that listed overseas this year. He said Relay has had short notice — roughly four to six weeks, or even less — to produce a video for a Chinese company to share with investors.
"There's something about the culture here that gets people very excited about trends," Fields said. "These IPO projects are very quick turnaround. Companies don't want to inform their competitors they're doing an IPO."