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76-percent drop in IPO launches
By Winny Wang |
January 1, 2009, Thursday
|
Print Edition
Print Edition
CHINESE companies raised 103.4 billion yuan (US$15 billion) from the domestic stock market via initial public offerings last year, dropping 76.84 percent from a year earlier.
A total of 76 companies launched IPOs on the Shanghai and Shenzhen stock exchanges in the period, compared with 118 IPOs in 2007.
Five companies, including China Coal Energy Company and China South Locomotive & Rolling Stock Corp, were listed on the Shanghai Stock Market, raising 73.6 billion yuan and 71 others raised 29.83 billion yuan from the Shenzhen market.
As of Tuesday, 27 of the 76 companies that had IPOs last year closed with share prices below their IPO prices. No IPO was launched in the fourth quarter last year after China's stock regulator tightened approval of new share sales amid the international financial turmoil.
In the period, domestic firms collected 232 billion yuan via IPOs, additional offerings, rights issues and convertible bond issuance, declining 56.67 percent from 2007.
"The sagging market will completely dampen new share sales and the government will not ease approvals for IPOs quickly, but the market may rebound if the government keeps loosening monetary policy and the economy recovers," said Zhang Qi, an analyst at Haitong Securities Co.
He expects that the bond issuance market will boom this year.
The Shanghai Composite Index, which tracked the yuan-denominated A shares and hard currency B shares, slumped about 65 percent last year, and the Shenzhen Composite Index lost about 62 percent. The total market value shrank more than 20 trillion yuan.
A total of 76 companies launched IPOs on the Shanghai and Shenzhen stock exchanges in the period, compared with 118 IPOs in 2007.
Five companies, including China Coal Energy Company and China South Locomotive & Rolling Stock Corp, were listed on the Shanghai Stock Market, raising 73.6 billion yuan and 71 others raised 29.83 billion yuan from the Shenzhen market.
As of Tuesday, 27 of the 76 companies that had IPOs last year closed with share prices below their IPO prices. No IPO was launched in the fourth quarter last year after China's stock regulator tightened approval of new share sales amid the international financial turmoil.
In the period, domestic firms collected 232 billion yuan via IPOs, additional offerings, rights issues and convertible bond issuance, declining 56.67 percent from 2007.
"The sagging market will completely dampen new share sales and the government will not ease approvals for IPOs quickly, but the market may rebound if the government keeps loosening monetary policy and the economy recovers," said Zhang Qi, an analyst at Haitong Securities Co.
He expects that the bond issuance market will boom this year.
The Shanghai Composite Index, which tracked the yuan-denominated A shares and hard currency B shares, slumped about 65 percent last year, and the Shenzhen Composite Index lost about 62 percent. The total market value shrank more than 20 trillion yuan.
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