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Domestic IPO markets shrink 86% in July amid accounting scams
By Lydia Chen |
August 2, 2011, Tuesday
|
Online Edition
Online Edition
THE accounting scandals of a slew of foreign-listed Chinese companies have affected the initial public offering markets in the mainland and Hong Kong as total capital raised from IPO listings in the two markets plunged nearly 86 percent in July year on year.
Last month saw 35 firms debut in the mainland and Hong Kong markets, raising a combined 22.74 billion yuan (US$3.53 billion), an 85.56 percent fall from a year earlier, China Venture reported today.
The sharp fall was attributed to a lack of confidence among investors after several foreign-listed Chinese firms suffered fraud allegations and securities supervisors also strengthened the screening of IPO applicants, the leading financial analysis firm said.
Twenty of the new listings chose to land in ChiNext, a NASDAQ-style board for high-growth and high-tech startups in Shenzhen Stock Exchange, while 15 firms were listed in Hong Kong. None of them chose to go public in the United States, where several Chinese firms have been delisted or suspended from trading due to their murky accounting practices.
The distrust in Chinese IPOs has forced several Chinese companies to postpone their scheduled IPO.
Xunlei Limited, a Chinese online video site partly owned by Google, decided to call off its IPO on the NASDAQ Global Select Market due to uncertainties, the company said in a previous statement.
Shanda Literature and Cloudary, a spin-off from the NASDAQ-listed Shanda Interactive Entertainment, also halted its scheduled IPO in New York Stock Exchange.
Last month saw 35 firms debut in the mainland and Hong Kong markets, raising a combined 22.74 billion yuan (US$3.53 billion), an 85.56 percent fall from a year earlier, China Venture reported today.
The sharp fall was attributed to a lack of confidence among investors after several foreign-listed Chinese firms suffered fraud allegations and securities supervisors also strengthened the screening of IPO applicants, the leading financial analysis firm said.
Twenty of the new listings chose to land in ChiNext, a NASDAQ-style board for high-growth and high-tech startups in Shenzhen Stock Exchange, while 15 firms were listed in Hong Kong. None of them chose to go public in the United States, where several Chinese firms have been delisted or suspended from trading due to their murky accounting practices.
The distrust in Chinese IPOs has forced several Chinese companies to postpone their scheduled IPO.
Xunlei Limited, a Chinese online video site partly owned by Google, decided to call off its IPO on the NASDAQ Global Select Market due to uncertainties, the company said in a previous statement.
Shanda Literature and Cloudary, a spin-off from the NASDAQ-listed Shanda Interactive Entertainment, also halted its scheduled IPO in New York Stock Exchange.
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