Chinese IPOs ebb on fraud scandals
By Lydia Chen |
July 6, 2011, Wednesday
|
Print Edition
Print Edition
THE value of Chinese global initial public offerings shrank during the second quarter as accountings scandals and fears of an Internet bubble hit investor sentiment, China Venture Co said yesterday.
Combined funds raised from these new listings also saw a fourth consecutive quarterly decline in the past three months to US$17.35 billion, compared with US$18.41 billion from January to March, the Beijing-based firm said.
The total number of Chinese IPOs around the world dropped to 102 from April to June, an 8.9 percent fall on the previous quarter and a shrinkage of 4.7 percent from a year ago, the leading financial research firm said.
China Venture noted in a report that the spate of accounting scandals among publicly traded Chinese companies have also cast shadows on the fate of these newcomers. Four firms, including Renren, the hottest Chinese IPO this season, have fallen below their IPO prices as investor distrust hit made-in-China firms.
Jean Sun, a partner at accounting firm PricewaterhouseCoopers' China operations, said at a press briefing on Monday that she expected the negative influence of these scandals to further slow the momentum of Chinese firms' IPOs in the US this year.
Sun said investors, especially those in the United States, may now be reluctant to bet their money on Chinese firms.
The majority of the new listings, 78 firms, debuted on Chinese mainland stock markets, scooping a total of US$10.15 billion while 16 firms went to Hong Kong and seven were listed in the United States. One firm went public in Taiwan, China Venture said.
The 24 overseas-listed Chinese firms, however, raised a combined US$7.2 billion, meaning their average individual values were US$300 million, which is more than double the average of nearly US$130 million for those listed on the mainland.
But for those listed in the US, the timing of their debuts seemed to have come at a wrong time. The seven firms listed there in the second quarter all come from IT industry, which made them vulnerable to investors' worries that their high valuations may be creating a new wave of bubbles in the technology industry, according to Beijing-based China Venture.
Combined funds raised from these new listings also saw a fourth consecutive quarterly decline in the past three months to US$17.35 billion, compared with US$18.41 billion from January to March, the Beijing-based firm said.
The total number of Chinese IPOs around the world dropped to 102 from April to June, an 8.9 percent fall on the previous quarter and a shrinkage of 4.7 percent from a year ago, the leading financial research firm said.
China Venture noted in a report that the spate of accounting scandals among publicly traded Chinese companies have also cast shadows on the fate of these newcomers. Four firms, including Renren, the hottest Chinese IPO this season, have fallen below their IPO prices as investor distrust hit made-in-China firms.
Jean Sun, a partner at accounting firm PricewaterhouseCoopers' China operations, said at a press briefing on Monday that she expected the negative influence of these scandals to further slow the momentum of Chinese firms' IPOs in the US this year.
Sun said investors, especially those in the United States, may now be reluctant to bet their money on Chinese firms.
The majority of the new listings, 78 firms, debuted on Chinese mainland stock markets, scooping a total of US$10.15 billion while 16 firms went to Hong Kong and seven were listed in the United States. One firm went public in Taiwan, China Venture said.
The 24 overseas-listed Chinese firms, however, raised a combined US$7.2 billion, meaning their average individual values were US$300 million, which is more than double the average of nearly US$130 million for those listed on the mainland.
But for those listed in the US, the timing of their debuts seemed to have come at a wrong time. The seven firms listed there in the second quarter all come from IT industry, which made them vulnerable to investors' worries that their high valuations may be creating a new wave of bubbles in the technology industry, according to Beijing-based China Venture.
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